By G. G. Goyal | Chartered Accountant
C. B. Thakar | Advocate
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Central Sales Tax Act — Section 5(3), Kerala General Sales Tax Act — Section 44 — Refund of tax paid can be claimed by the dealer, who has paid tax to the Government and not by the purchaser, who has purchased the goods in auction without specifying that such purchase is for the purpose of export but later exported the same.
Facts:
The appellant purchased tea, from the tea planters, directly in open auction and thereafter exported the same to foreign countries. They were allowed exemption of tax on export sale. The auction purchase price was inclusive of sales tax. The tea planters, being liable to pay tax to the State Government paid due taxes. Appellant claimed refund of taxes paid on the basis that the sale by tea planters was penultimate sale, u/s.5(3) of CST Act, as they have collected tax from the appellant the same should be refunded to him.
Held:
The phrase ‘sale in the course of export’ used in section 5(3) of Central Sales Tax Act, comprises three essentials viz., (i) there must be a sale of goods, (ii) those goods must be actually exported, and (iii) the sale must be part and parcel of export.
To ‘occasion export’ there must exist such a bond between the contract of sale and actual export. Each link is inextricably connected with the one immediately preceding, without which a transaction cannot be called a sale ‘in the course of export’.
In the facts and circumstances of the case it was not clear that the sale and purchase between the parties was inextricably linked with the export of goods. At the time of purchase of goods, in auction, there was nothing on record to show that the purchase was for the purpose of export. Since no such claim was made at that stage, sales tax was rightly realised by the sellers and paid to the Government.
Under section 44 of Kerala General Sales Tax Act, 1963, it was clear that it was only the dealer of tea on whom assessment had been made could claim refund of tax and no one else. Therefore, refund of tax could not be made to the appellants.
