USHA MARTIN BLACK LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) By these two references, which arise out of the common order of the Tribunal, the following question of law has been referred to this Court for opinion :

(2.) The assessee, M/s. Usha Martin Black Ltd., is a manufacture in iron and steel wire ropes and wires. It has its factory at Ranchi in the State of Bihar and head office at Calcutta. The goods manufactured at the above factory are transferred to its Bombay office for sale. The assessee is registered as a dealer under the Bombay Sales Tax Act, 1959 ("the Bombay Act"), as also under the Central Sales Tax Act, 1956 ("the Central Act"). One M/s. Kamani Engineering Corporation Ltd. ("Kamani") entered into a contract with a foreign buyer in Iran for sale of standard galvanised steel wire ropes. For performing this contract Kamani entered into an agreement with Aluminium Industries Ltd., for purchase of these goods. Aluminium Industries Ltd., in turn entered into a written contract dated October 28, 1977, with the assessee for purchase of the very same goods in order to enable it to perform its contract with Kamani. Certain correspondence in this regard was exchanged between the assessee and Aluminium Industries Ltd., under letters dated January 5, 1978 and March 16, 1978. In furtherance of the said agreement, the assessee shipped the goods out of India under bill of lading No. PK 33 dated May 19, 1980, and raised an invoice No. 2062286 dated June 4, 1980 for Rs. 8,29,600 in the name of Aluminium Industries Ltd., Bombay. Since, according to the assessee this sale was covered by section 5(1) of the Central Sales Tax Act, 1956, no sales tax was recovered by it in respect of the same. However, with a view to seeking statutory clarification, on November 21, 1981, the assessee made an application to the Commissioner of Sales Tax under section 52(1)(e) of the Bombay Act seeking determination of the question whether any tax was leviable on the above sale effected by it to M/s. Aluminium Industries Ltd. The submission of the assessee in the above application was that the sale was a sale in the course of export and hence not liable to tax under the Bombay Act. The Deputy Commissioner of Sales Tax, who took up the determination proceeding, did not accept the above contention of the assessee, as according to him, the transaction in question did not amount to sale in course of export within the meaning of section 5(1) of the Central Act but was a sale in the State of Maharashtra liable to tax under the Bombay Act. He therefore, by his order dated January 30, 1982, held it to be an intra-State sale in Maharashtra. Aggrieved by the above order of the Deputy Commissioner of Sales Tax in the determination proceeding under section 52(1)(e), the assessee appealed to the Maharashtra Sales Tax Tribunal ("the Tribunal"). In the meantime, the assessment of the assessee under the Bombay Act was also completed by the assessing authority. Assistant Commissioner of Sales Tax, who levied tax on the above transaction under the said Act holding it to be an intra-State sale in the State of Maharashtra. The assessee also filed appeal to the Deputy Commissioner against the above order of assessment. The Deputy Commissioner, after hearing the assessee, dismissed both the appeals. The assessee went in further appeal to the Maharashtra Sales Tax Tribunal ("the Tribunal"). The Tribunal took both the appeals together for hearing and on hearing the parties, dismissed the same by a common order. The Tribunal did not accept the contention of the assessee that the sale of galvanised steel wire ropes by the assessee to M/s. Aluminium Industries was an export sale. The Tribunal upheld the finding of the taxing authorities that the sale was an intra-State sale exigible to tax under the Bombay Act. Hence this reference at the instance of the assessee.

(3.) We have heard Mr. Jetley, learned counsel for the assessee, who submits that the Tribunal erred in law in holding that the sale in question was an intra-State sale in Maharashtra. According to Mr. Jetley the sale, being a sale on f.o.b. basis, was a sale in course of export falling under section 5(1) of the Central Sales Tax Act, 1956 . It was contended that taking of the bill of lading under instructions from the buyer M/s. Associated Industries, in the name of Kamani Engineering Corporation, did not and could not alter the true character of the transaction. It was also pointed out that the payment of full consideration even before taking the goods on board was not a relevant circumstance in deciding the true nature of the transaction in view of the subsequent developments which necessitated such payment. According to Mr. Jetley, the sale by the assessee was a sale in the course of export and not an intra-State sale as held by the Tribunal.