Page 62 - GSTL_14th May 2020_Vol 36_Part 2

164 GST LAW TIMES [ Vol. 36
the purposes of such mission, United Nations or other body,
then, the Central Government may, by notification in the Offi-
cial Gazette, exempt, subject to such conditions as may be
specified in the notification, the tax payable on the sale of such
goods under this Act.”
(4) The provisions of sub-section (3) shall not apply to the sale of goods
made in the course of inter-State trade or commerce unless the dealer sell-
ing such goods furnishes to the prescribed authority a certificate in the pre-
scribed manner on the prescribed form duly filled and signed by the offi-
cial, personnel, consular or diplomatic agent, as the case may be.”
2. We shall narrate the factual context of Civil Appeal No. 2217 of 2011,
before we address the legal issue involved in these appeals, treating this to be the
lead case. The dispute relating to the other three appeals are not identical, but the
question of law being the same in all these appeals, we shall avoid narrating in
detail the sequence of events which led to filing of the said appeals, except to the
extent such narration is necessary for understanding the scope of these appeals.
In Civil Appeal No. 2217 of 2011, the period of assessment is 1995-96. The re-
spondent-assessee Bombay Machinery Store had purchased electricity motors
and its parts in the said financial year out of the State and sold them to purchas-
ers within the Kota region of the State of Rajasthan. For such sales, they obtained
the benefit of exemption under Section 6(2) of the 1956 Act. These goods had re-
mained with the transport company upon arrival in Kota for more than a month.
Revenue’s case is that after importing these goods into Rajasthan, sale was effect-
ed through bilty (transport receipt) on obtaining separate orders. Such sale, it is
the revenue’s case, constituted sale within the State and hence taxable @ 12% per
annum under the Rajasthan Sales Tax Act, 1954. Civil Appeal No. 2220 of 2011
relates to the same firm but for the assessment year 1994-95. Quantum of sales for
the year 1994-95 effected through the same process was Rs. 3,15,639/- and for
1995-96 it was Rs. 2,60,93/-. Claim of benefit under Section 6(2) of the 1956 Act
was rejected and tax along with interest and penalty was imposed under the
State Act by Commercial Tax Officer, Anti-Evasion Circle-I, Kota after a survey
by two orders, both dated 11th December, 1997. The appeals by Bombay Machin-
ery Stores were allowed by the Deputy Commissioner (Appeals), Commercial
Taxes, Kota following a decision delivered on 8th March, 1996 by the Rajasthan
Tax Board in the case of CTO v. Bhagwandas & Sons (1996 Tax World 107). The
orders of the first appellate authority were passed on interpretation of the first
explanation to Section 3B(1) of the 1956 Act. Imposition of tax, interest and penal-
ty under the State Act was quashed. In State Tax authority’s appeal before the
Tax Board, reliance was placed on two circulars issued by the Commissioner
bearing S. No. 1132A : CCT Circular F. 11(3)CST/Tax/CCT/1/61, dated 15th
April, 1998, clarified by a further circular dated 19th July, 1999. The Board did
not take into consideration these two circulars. These were not referred to in the
orders of the Tax Assessment Officer. The Board sustained the view of the Depu-
ty Commissioner (Appeals) in a composite order. This order was challenged by
the revenue by filing two revision petitions before the High Court, as two ap-
peals were disposed of by the Board by its order dated 24-11-2004. The High
Court, in the judgment delivered on 14th September, 2007 confirmed the Board’s
order and quashed two circulars bearing S. No. [1115B], dated 16th September,
1997 and S. No. 1132A, dated 15th April, 1998. These circulars sought to impose a
time limit on retention of goods in the carrier’s godown, beyond which time the
revenue was to treat obtaining of constructive delivery of the goods involved.
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