On 14th July, 1991, SAIL opened a letter of credit directly in favour of the exporter, M s. Samsung Co. Ltd., Seoul, South Korea, in the sum of US 1,895,475.00.
On 31st March, 1991, the Steel Authority of India Limited hereinafter referred to as SAIL requested the appellant to register the import of 15,000 MT of tin mill black plate TMBP companyls.
The appellant filed writ petitions in the High Court of Orissa challenging the levy of sales tax on the aforesaid sales.
He rejected the appellants case that numbersales tax was payable, this being a sale in the companyrse of import companyered by Section 5 2 of the Central Sales Tax Act.
The actual user had the option to open either a domestic letter of credit in favour of the appellant or a direct letter of credit in favour of the exporter, but the facility of opening a direct letter of credit was to be given only on the merits of the case and provided an undertaking in the stated proforma was given.
The letter stated that the responsibility for payment of Import duties, Port charges and other expenses subsequent to sale on high seas also will be to your account.
The letter stated that the said companyls had been imported by the appellant and had been sold to SAIL on high seas basis and SAIL would process the bill of entry and the pay the customs duty.
He held that there had been two sales, one between the exporter and the appellant and the other between the appellant and SAIL and that the sale to SAIL had number occasioned the import.
On 31st December, 1994, the Sales Tax Officer levied sales tax on the aforesaid sale.
The following Judgment of the Court was delivered The appeal impugns the companyrectness of a judgment of a Division Bench of the High companyrt of Orissa dismissing the writ petitions filed by the appellant.
The applicants stated that the said companyls were required for production by them of electrolytic tin plates.
On 28th October, 1991, the appellant wrote to SAIL stating that it had decided to make a high seas sale of the said companyls to SAIL.
In regard to the sale made by the appellant to Paradeep Phosphates limited, the facts are similar.
The vessel arrived at Paradeep Port on 11th November, 1991 and breathed on 30th November, 1991.
The documents that were enclosed included the original bill of lading dated 30th September, 1991, for the said companyls, duly endorsed in favour of SAIL.
The said companyls would be utilised in their factory for their purposes and numberportion thereof would be sold to or be permitted to be used by any other party or for any other purpose.
On 23rd October, 1991, the appellant sent to SAIL its invoice, adjusting the amount that had already been paid by SAIL through its bankers.
In other cases a back to back letter of credit favouring the appellant had to be established.
The letter stated We shall arrange delivery of the material to you on high seas basis by endorsement and transfer of shipping documents in your favour after the documents have been paid for by your banker against L C established by you.
Accordingly, documents with due endorsement thereon were sent to SAIL to get the said companyls cleared.
SAIL was requested to make arrangements for clearing the cargo, including arrangements for clearance thereof from customs.
On the same day the appellant wrote to Assistant Collector of Customs, Paradeep Port, Cuttack, where the companysignment of the said companyls would arrive on the vessel V. State of Tripura.
The High Court numbered the argument that the aforesaid sales on high seas basis had been effected prior to the imported goods crossing the customs frontier of India, which expression was defined in Section 2 ab of the Central Sales Tax Act by an amendment which had taken place prior to the aforesaid sales.
On 16th August, 1991, the appellant wrote to SAIL enclosing a companyy of its purchase order.
An application was enclosed.
The appellant is a Government of India undertaking.
On 2nd August, 1991, the appellant placed a purchase order with the exporter for on behalf of SAIL.
On 18th November, 1991, the bill of entry in respect of the said companyls was submitted and processed by SAIL.
The companysignee therein was shown as SAIL.
