BOMBAY COTTON P LTD Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) UNDER these three writ petitions under Article 226 of the Constitution of India, each of the petitioner prays for issuance of a writ in the nature of prohibition, certiorari, mandamus or any other appropriate writ, order or direction for restraining the respondents from assessing or reassessing the tax on the petitioner Companies, turn over in pursuance of the impugned notices.

(2.) THE relevant facts, out of which these three writ petitions arise, are like this : The petitioners, three Companies, are private Companies of Sri Gamganrgar with head offices at Bombay According to the writ allegations, their main business is to buy cotton in Rajasthah and in Punjab and to export the same outside the territory of India through their head offices. They purchased cotton from the local dealers, which was partly sold within Rajasthan, partly sold in the course of inter -State trade, partly outside Rajasthan and a part of it was exported out of India after ginning cotton and pressing them into bales. The dispute in all these writ petitions relates to cotton purchased by the petitioner Companies from the local dealers in Rajasthan and exported out of India through their head offices. All these writ petitions relate to the accounting years 1961 -62 and 1962 -63. In the original assessment orders under the Rajasthan Saks Tax Act (hereinafter called the RST Act), cotton purchased by these three Companies from local dealers and exported through their head offices outside India, no purchase tax was levied on the representation of these Companies before the Assessing Authority that cotton sold by the local dealers to them and purchased by them were actually exported out of India and so were purchases made in the course of export, and, therefore, they were not liable to purchase tax It may be pointed out here that exemption from purchase tax was sought by these Companies under first proviso to Section 5 of the RST Act read with Section 5 of the Central Sales Tax Act (hereinafter called the CST Act), simply on the ground that purchases made by the petitioner Companies were in the course of export. It was on such representations made by the petitioner Companies that the Assessing Authority, in its original assessment orders, did not levy purchase tax on cotton purchased by the petitioner Companies from local dealers and actually exported it out of India In this connection, it is pertinent to notice the relevant notifications. The first notification relevant in this case issued by the Government is dated March 28, 1960, which has been issued Under Section 4(2) of the RST Act. According to this notification, sale of the cotton to registered dealers was exempt if it was intended to be sold by such dealers in the course of export cut of India, provided such dealer made declaration in the form set -out in the notification. The next relevant notification is dated March 26, 1962, which came to be issued in the exercise of the powres conferred by Section 5A of the RST Act, in which 11 items of goods including the cotton were specified for the purpose of levy of purchase tax Under Section 5A of the R.S.T Act. The third relevant notification is of March 23, 1963. By this notification the first notification dated March 28, 1960, granting exemption to sale of cotton for purposes of export, was cancelled in respect of 9 items of goods including cotton Thus, the net result of these three notifications was that sales of cotton made by the local dealers to exporters remained exempt from levy of sales -tax from March 28, 1960 to March 23, 1963. The purchases made by the exporters of cotton from the local dealers in Rajasthan remained liable to purchase tax Under Section 5A of the RST Act from the date of the second notification dated March 26, 1962 to the date of the third notification dated March 23, 1963.

(3.) THE respondents have filed replies in all these writ petitions. Their contention is that although sale of cotton by local dealers to the petitioner Companies made on declaration by the petitioner Companies that they were purchasing cotton for export out of India are exemp from tax under notification dated March 28, 1960, purchases made by these Companies on or after March 26, 1962, when the Givernment Notification dated 26 3 -1962 was issued, are liable to purchase tax till March 23, 1963 The exemption from tax on sale was cancelled by notification dated March 23, 1963. The contention of the non -petitioners is that purchase of cotton made by the petitioner Companies from local dealers were not purchases in the course of export but were only for the purpose of export and do not, therefore, fall within the definition of 'sale' and 'purchase' in the course of export outside the territory of India, as given Under Section 5 of the CST Act.