By C. B. Thakar | Advocate
G. G. Goyal, Janak Vaghani | Chartered Accountants
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Export or goods — Sale of goods to foreigngoing person — Not exempt — Section 5(1) of the CST Act.
Penalty without detailed reasons — Penalty not leviable — Section 9 of the CST Act read with section 36(2)(c) of the BST Act.
Facts :
The dealer claimed exemption from payment of tax on sale of goods to foreign-going person, where delivery of goods is given before the custom area, but payment is received in foreign currency, u/s.5(1) of the CST Act being sale of goods in the course of export, which was disallowed and confirmed by the Tribunal. The Bombay High Court, in reference application filed by the dealer u/s.61 of the BST Act, confirmed the order of the Tribunal.
Held :
The sale of goods is complete, the movement goods were segregated for sale and amount of sale consideration was paid in shop. The delivery of goods was to be given just before the custom area. Therefore, the sale was complete with the factum of delivery of goods. There was no compulsion on the purchaser to export it. Absence of export was not to nullify the transaction of sale.
In order to claim sale of goods as exempt being sale in the course of export, the crucial fact is the sending of goods to a foreign destination where they would be received as imports. In absence of proof of export of goods and no material to prove that it was impossible to divert goods, the claim of export was held as properly disallowed by the Tribunal.
As regards levy of penalty u/s.36(2)(c) of the BST Act for concealment of particulars of sale and purchases liable to tax, the High Court held that the Revenue has to establish that the assessee has knowingly furnished inaccurate particulars of any transaction as such liable to tax. The assessee has relied on interpretation of the provisions which involved complexity of principals of interpretation. The Court while deciding the first issue was required to go into the details of the constitutional provisions followed by various judgments of the Apex Court as well as of this Court. Therefore levy of penalty u/s.36(2)(c) of the BST Act retained by the Tribunal was not confirmed.
