1. This tax revision case raises an interesting question based on interpretation of certain terms in tax law well-known in legal circles.
Though the modus operandi of the transaction is also well-known in this country, minute differences based on the terms of the contract give rise to different results as to whether there was a sale in the course of import or a local sale. A determination on the above questions will lead to drastic consequences in the matter of the levy of tax. It is good to remember Section 5 of the Central Sales Tax Act, 1956 in this connection to find out when there is a sale or purchase of goods in the course of import or export. Sub-sections (1) and (2) of Section 5 of the CST Act lays emphasis on the sale or purchase occasioning an export or import or transfer of document of title to the goods taking place in high-sea. Sub-section (3) of Section 5 may not be relevant for the purpose of our case.
2. Without, first, adverting to the facts of the case, one cannot go to legal principles. The petitioner is doing business in fertilisers. For the assessment year 1983-84, under the Tamil Nadu General Sales Tax Act, 1959, they reported a total and taxable turnover of Rs. 6,89,16,928.81 and Rs. 6,88,84,258.91 respectively in their returns.
The assessing authority found that the assessee had imported liquid ammonia at Madras Port and sold it to Southern Petrochemical Industries Corporation Ltd. (hereinafter called SPIC) for a sum of Rs. 17,74,93,753.27 during the year 1983-84, through the sales depot at No.1, Vanniar Street, Madras-1. There were no documents to suggest that the sales were effected while the goods were on board the ship. The assessing authority, therefore, included the above turnover in the taxable turnover and assessed the same to tax under the TNGST Act, 1959 at 3 1/2 per cent single point. The assessment was as follows : Add : Sales suppressions noticed on inspection by the Enforcement Wing Officer, Madurai He also levied penalty at 150 per cent under Section 12(5)(iii) of the TNGST Act, 1959 quantified at Rs. 62,12,281. The objections of the petitioner stating that there was no sale depot at No. 1, Vanniar Street, Madras-1, that the shipments were on account of SPIC Ltd., that the import was made both by the assessee and on behalf of SPIC Ltd., that it was a joint purchase by the assessee and SPIC Ltd. and that therefore, the provisions of the TNGST Act would not come into play, were rejected outright by the assessing authority. Here and now, we would like to point out that the assessing authority has made several factual errors, probably because all the documents were not placed before the assessing authority. For instance, the assessing authority says that the assessee had the right to redistribute the liquid ammonia, according to the demand of fertiliser manufacturers at the time of arrival of the ship, that the consignments were taken delivery by the assessee and subsequently supplied to SPIC Ltd. at Tuticorin and that the import of liquid ammonia was not only for SPIC Ltd., but also for certain other fertiliser companies. But, the assessing authority did notice the fact that the purchase was a joint purchase by the assessee and SPIC Ltd. and that instead of raising a sale invoice on SPIC Ltd., the assessee raised only a debit note for the value of the goods supplied plus profit in the guise of service charges at 1.5 per cent. He, therefore, concluded that there were two sales, one by the foreign seller to the assessee and the second a local sale by the assessee to SPIC Ltd. 3. In the first appeal, it is not disputed that almost all the documents and materials were placed before the authority and this is admitted by the first appellate authority in the following words : "During the course of argument of appeal, the learned authorised representative filed a plethora of documents, contracts and judgments in support of their contention that the transaction with SPIC amounted to a sale in the course of import, not liable to tax." 4. The first appellate authority, however, made certain factual errors, because he also says that the consignments were taken delivery by the assessee and subsequently supplied to SPIC Ltd. at Tuticorin. The first appellate authority, however, records the modus operandi involved in the import of goods. The import was made by the assessee to meet the requirements of IFFCO, SPIC, FACT and the assessee (RCF) from Petrochemical Industries Company (KSC), Kuwait. The agreement between the assessee and the SPIC Ltd. was produced. The fact of joint purchase by assessee and SPIC Ltd., was noticed. But, the first appellate authority lays emphasis on the fact that the import was not for SPIC alone, but to certain others also. He also notices that the SPIC Ltd., Tuticorin, did not possess any import licence. He makes another mistake when he says, "the import was necessary only because of the contract between RCF Ltd., and the foreign sellers". This is contrary to his own finding earlier that the Government of India formed a committee, in which, the assessee, SPIC Ltd. and other fertiliser companies mentioned above were parties. The quantum of import and the price were to be decided by the committee. It was only in pursuance of this consortium meeting that the assessee proceeded to buy the requirements from Kuwait. Similarly, the first appellate authority has noticed the fact that the quantity of goods meant for SPIC Ltd., Tuticorin was unloaded at Tuticorin by delivering the same to SPIC Ltd. at the Tuticorin, Port. The only comment of the first appellate authority is that the quantity discharged was smaller than the quantity shown in the bill of lading. Another mistake committed by the first appellate authority is that he assumes that the assessee had a right to redistribute the imported commodity. The first appellate authority, therefore, confirmed the levy of tax and penalty.
5. A second appeal was filed before the Sales Tax Appellate Tribunal (Additional Bench), Madras. The Appellate Tribunal also noticed the modus operandi and how on the basis of the consortium meeting, the requirements of liquid ammonia of the four fertiliser companies, was agreed to be imported from Kuwait. They have also referred to the agreement between the assessee and the SPIC Ltd. They also lay emphasis on the fact that the import was not for SPIC Ltd. only. Secondly, they notice the fact that in the Invoice No. NH 1841/1 dated November 6, 1983 of the foreign seller, which shows the name of the assessee alone and SPIC Ltd., Tuticorin does not at all figure in the invoice.
Thirdly, they notice the fact that the SPIC Ltd., did not have an import licence. The entire consideration was paid by the assessee and the assessee, in turn, collected the money from SPIC Ltd., and other customers. They have come to the conclusion that at the time of loading of the consignment in the ship, the assessee alone was the owner of the goods, because they paid the entire consideration. But, they have indicated that the assessee collected the money from SPIC Ltd., and other customers, "while the consignment is in the ship". The last mentioned finding is not borne out by records, because if that were a fact, even then, the assessee will get the benefit of Section 5(2) of the CST Act. The Appellate Tribunal concluded that there was no privity of contract between SPIC Ltd., and the foreign seller. They also make the mistake that the import was necessary only because of the contract between the assessee and the foreign seller. Another significant fact relied on by the Appellate Tribunal is that the Government of India in their letter D.O. Kr. No. 123(48)/78 dated July 17, 1978 had issued a letter of authority to the assessee in the following terms : "Kindly recall the discussions held on the 10th July, 1978 in regard to the organisational arrangement for import, sale and transport of ammonia." From the above letter, the Appellate Tribunal concludes that the assessee imported the goods and then sold the same to SPIC Ltd. They also referred to the fact that the assessee did not raise a sale invoice on SPIC Ltd., but raised a debit note for the value of the goods plus profit in the guise of service charges at 1.5 per cent. This inference may not be factually correct and we can refer to the same, a little later. The Appellate Tribunal also makes a mistake that the assessee had a right to redistribute the imported goods according to the demand of the fertiliser manufacturers at the time of arrival of the ship. We do not find any warrant for the above conclusion from the records. They have also laid unnecessary emphasis on the fact that the goods discharged to Tuticorin for SPIC Ltd. was lesser than the quantity mentioned in the bill of lading. The Appellate Tribunal also found that the assessment was made on the basis of figures in the accounts and therefore, there was a clear case made out for penalty under Section 12(5)(iii) of the TNGST Act, 1959.
6. We have critically commented on the orders of the Assessing Authority, first appellate authority and the Appellate Tribunal, because many of the statements in their orders are factually incorrect and some of the inferences made by the authorities from the factual records are also legally unsustainable. We will presently proceed to refer to the records and materials to prove that the authorities have made inferences, which are totally unsustainable in law and would practically amount to a perverse inference, which no ordinary person will make even on a bare perusal of the document.
7. Mr. N. Sriprakash, learned counsel, has argued the case for the petitioner, by pressing three points : (2) Even if there was an independent sale by assessee to SPIC Ltd., it was so inextricably connected with the sale by the foreign seller, that the whole transaction would fall within the expression, "purchase of goods in the course of import".
(3) In any event, the levy of penalty under Section 12(5)(iii) of the TNGST Act is not warranted, because the assessment was under Section 12(2) of the TNGST Act.
8. On the other hand, Mr. R. Mahadevan, learned Government Advocate for the Revenue, has pointed out on the very same materials that there were two independent sales and the sale by the assessee to SPIC Ltd., was assessable under the TNGST Act, 1959.
9. Both the counsel have relied upon several decisions. We will first advert to the documents relied on before us and the legal inference that can be drawn from the documents as to whether there was a relationship of principal and agent between the parties, namely, SPIC Ltd., and the assessee respectively. We start with the admitted fact that the import was a joint purchase by the assessee and the SPIC Ltd. This has been referred to in the order of assessment as well as in the order of the Appellate Tribunal. To avoid any dispute on this fact, we will refer to the actual contract dated June 24, 1983 at page 66 of typed set which says that the buyers are "Rashtriya Chemicals & Fertilisers Limited, Bombay, for its own use and also as agent on behalf of Fertilizers and Chemicals Travancore Ltd., Cochin, Southern Petrochemical Industries Corporation, Tuticorin and Indian Farmers Fertilizers Co-operative Ltd., Kandla". There is also a reference to joint purchase by SPIC Ltd., and assessee in clear terms, in Clause 2 of the contract entered between the assessee and SPIC Ltd. On the above admitted terms of purchase, what is the legal inference one can draw regarding the relationship of the assessee and SPIC Ltd., or the other customers 10. Learned counsel for the petitioner refers to Halsbury's Laws of England regarding the meaning of the words "joint purchase". In the 4th Edition of Halsbury's Laws of England, at page 622 of volume 35, it is stated as follows : "Possession by co-owners.--Where two or more persons are concurrent owners of the same property each ordinarily has both the possession and the right to possession of the whole contemporaneously with the others. Hence one of two co-owners cannot ordinarily maintain an action against the other for the common chattel while it is in the other's possession. In the case of joint ownership, the joint owners have both single possession and a single joint right to possess.
Owners in common have single possession, but several rights to possess," Further at page 637, it is explained that joint ownership or joint tenancy is marked by the following four significant characters : (1) Unity of possession, (2) Unity of interest, (3) Unity of title and (4) Unity of time of commencement.
11. In the Permanent Edition of Words and Phrases, the very same characters of unity of time, title, interest and possession are emphasised.
12. In the Corpus Juris Secundum, the words, "joint interest" is explained and distinguished from tenants in common. It is also explained at page 311 of Volume 48-A, that a joint tenancy can be created only by purchase or other act of parties. A joint tenancy is destructible by any act which destroys one or more of the unities. In particular, there is reference at page 346 which says that a joint tenancy may also be severed by destruction of the unity of possession, as by partition. Says, Mr. N. Sriprakash, learned counsel, that the joint purchase by assessee and SPIC Ltd., is a case coming under the above provisions. Mr. Sriprakash has referred to the above legal terminologies to impress upon us that in the instant case, the import was by way of a joint purchase which signify unity of title and possession and that the same was destroyed by act of parties when the goods were delivered SPIC Ltd., at Tuticorin Port. According to learned counsel for the petitioner, a partition takes place when the goods were physically unloaded at Tuticorin and appropriated by SPIC Ltd. He, therefore, contends that the title never vested in the assessee to enable them to sell the same to SPIC Ltd. He, therefore, points out that the above records clearly show that there was privity of contract between the foreign seller and the actual user, namely, SPIC Ltd. The foreign buyer was fully aware of the actual user and that the import was made on behalf of SPIC Ltd., a disclosed principal. Learned counsel for the petitioner also refers to the judgment of the Madras High Court reported in [1978] 42 STC 243 (State of Tamil Nadu v. Madras Motor Parts Dealers' Association). In that case, an association was allowed to act as agent for its members, get the goods imported on behalf of the members and then disburse the same to the members. The licence to import was in the name of the State Trading Corporation, but the letter of authority given to State Trading Corporation authorised them to permit the association to import on behalf of the State Trading Corporation. It was argued that there was no sale by the association to its members. It was held that there was no sale by the association to its members and no tax could be imposed on the transaction. In fact, the Madras High Court held that the case in Mod. Serajuddin v. State of Orissa reported in [1975] 36 STC 136 (SC), did not apply and that an agency could exist under the facts and circumstances of the case.
Similarly, in [1965] 16 STC 436 (Mad.) (K.P. Sitaram & Co. v. State of Madras), the assessee claimed that certain sum represented turnover of transaction, in which, they acted as buying agents and they were, therefore, not liable to sales tax thereon. The Madras High Court, on consideration of facts and circumstances of the case, held that the correspondence showed that the assessee acted as buying agents. In the case before us also, the materials placed before us clearly indicate that the goods were imported on behalf of SPIC Ltd. Therefore, according to the learned counsel for the petitioner, it was a clear case of the assessee acting as agent of the disclosed principal, SPIC Ltd. and consequently, there was no sale by the assessee to SPIC Ltd. 13. Reference is also made to the import and export policy for the period from April, 1983 to March, 1984. The words "actual user" is defined as a person who applies for licence of import of any item.
Secondly, it is stated that the requirements of an actual user could be met through any of the systems, namely, Open General Licence or Automatic Supplementary Licensing or allotment through canalysing agencies. It is clearly explained that raw materials can be imported under Open General Licence and actual users are eligible importers.
Certain conditions are imposed on actual users at the time of clearance of goods. Paragraph 383 of the Policy refers to import through agents and the Revenue points out that it is for the licence holder to appoint a person as agent. On the other hand, paragraph 384 is relied on by the aasessee and which enables a person effecting imports under Open General Licence to utilise the services of an agent only for the purpose of placing an order, arranging movement or clearing the goods through customs. But, it is made clear that remittances or opening letters of credit should be made only by the licensee. It is also stated that the agents can also open letters of credit and make remittances on behalf of eligible importers, when agents import goods for Government departments, public sector Enterprises, owned or controlled by the Government.
14. On the second point, learned counsel for the petitioner refers to the documents, namely, the Consortium Committee meeting, the Government of India letter dated July 17, 1978 and September 14, 1981, the terms of the contract and the memorandum of agreement between SPIC Ltd., and the assessee to show that the supply of liquid ammonia to SPIC Ltd., was a transaction inextricably connected with the import of goods. We are satisfied from the above documents and the terms of contract between SPIC Ltd., and the assessee that the argument of the learned counsel is acceptable. It would be useful to refer to some of the terms of the contract between the assessee and the SPIC Ltd. SPIC Ltd., is to furnish to the assessee its schedule of ammonia requirements on a six monthly basis. Based on such requirements, the assessee is to make arrangements for import of liquid ammonia as a joint purchase. Mr. N.Sriprakash also refers to the aspect of this case to suggest that liquid ammonia cannot be preserved under normal circumstances. It requires special arrangements like, maintenance of temperature at 33?F.This is precisely the reason why the requirements are assessed on a six monthly basis. Clause of the agreement says that the bill of lading shall be in the name of the assessee. Clause 6 says that it shall be open to the assessee and SPIC Ltd., to agree on reduction or increase in the quantities to be delivered to SPIC. Learned counsel for the Revenue was trying to interpret this clause as giving a right to the assessee to reduce the quantity of supply. In fact, the authorities below have also made a mistake in thinking that the assessee has a right to make a supply at its own sweet pleasure, after the import of the goods. On the other hand, Mr. Sriprakash rightly points out that there can be a reduction only on mutual agreement and no unilateral right is given to the assessee. The above conclusion also follows from the fact that the purchase was a joint purchase and the parties were joint tenants. We have already explained the meaning of those expressions. The only clause which is in favour of the Revenue is Clause 7 which says that it is the assessee's responsibility for taking out a comprehensive open insurance policy. But, it is made clear that SPIC shall bear the insurance charges on a proportionate basis. Clause 8 says that customs duty, if any, shall be payable by SPIC Ltd. Clause 12 says that on receipt of bank documents, the assessee should forward a xerox copy of the same to SPIC Ltd., along with their final debit note including the service charges on the C & F value of consignment.
The service charges shall not include the financial charges paid by assessee to their bankers. The service charges shall be at the rate of 1.5 per cent C & F from April 1, 1982 onwards. The final debit note should be accompanied by five important documents relating to the import of the goods. The assessee only renders assistance to SPIC Ltd., for arranging to discharge the goods through clearing agents. The assessee shall issue delivery orders in favour of SPIC before arrival of the individual shipments at Tuticorin. Clause 18 again makes it very clear that the delivery of imported ammonia shall be a joint purchase on account of the assessee and SPIC Ltd. The understanding in the agreement between parties is on the assumption that such a transaction would not involve payment of sales tax. Clause 19 provides for the sharing of the arbitration charges proportionately between the assessee and the SPIC Ltd. This again is an attribute of the joint purchase. In our opinion, the above documents clearly point out that even assuming that the debit note including service charges could be taken as a sale by assessee to SPIC Ltd., it must be deemed to be a transaction inextricably connected with the import and thus eligible for exemption under Section 5(2) of the CST Act. In fact, Mr. Sriprakash argues that the assessee would be violating the import, export policy, if they subsequently sold goods to any other party.(SC) (Deputy Commissioner of Agricultural Income-tax and Sales Tax, Ernakulam v.Indian Explosives). In that case, it was held on the basis of actual user import licence and the letter of authority that the import of the goods by the assessee was for and on behalf of the local purchaser and the assessee could not, without committing breach of contract, divert the goods so imported for any other parties. The case on hand is almost identical to the above decision, because in this case also the assessee could not divert the goods, unless he intends to commit a breach of contract.(SC) (State of Maharashtra v. Embee Corporation), the bill of lading described the name of the assessee in the case, as the consignee of the goods. On arrival, the consignment was forwarded to the consignee name in the contract. The assessee claimed exemption from sales tax on the ground that the supply was under the contract and it was in the course of import of goods into India. The High Court also held that there were two sales, but both the sales were integrated and inter-linked so as to form one transaction and as such, the sale by the assessee had occasioned the import of goods and was exempt from sales tax. The Supreme Court of India affirmed the decision that the import of goods was the direct result of the contract of sale between the assessee and that there was a one single transaction though there was a tripartite arrangement.
17. The case in [1997] 105 STC 580 (SC) (K. Gopinathan Nair v. State of Kerala) is relied upon by both the parties. Import of raw cashewnuts from the year 1970 could be undertaken only through canalysing agents.
The canalysing agency (CCI) imported the raw cashewnuts on its own on a wholesale basis by entering into independent contracts with foreign sellers. Thereafter, they made them available to the assessees and others. The assessee claimed exemption under Section 5(2) of the GST Act. The Supreme Court of India affirmed the decision of the High Court that the sales were exigible to local sales tax on the basis of seven stated points. A perusal of the said points, which impelled the Supreme Court to hold in favour of the Revenue, are absolutely absent in our case. We have already indicated the salient features of the transactions in our case. These features clearly indicate that the transactions were inextricably connected with one another and together they occasioned the import of the goods. We accept the argument of Mr.
Sriprakash that though there may be two transactions, they are so integrally inter-connected that they almost resemble one transaction and the movement of goods from foreign country to India can only be ascribed to such composite well integrated transaction comprising of two apparent transactions dovetailing into each other.
18. Lastly, Mr. Sriprakash argued that the assessment was clearly a best judgment assessment under Section 12(2) of the TNGST Act, 1959 and there was no basis for levying penalty under Section 12(5) of the TNGST Act, 1959.
19. Mr. R. Mahadevan, learned Government Advocate for the Revenue, referred to the Government of India letter dated July 17, 1978 entrusting the import of goods to the assessee and to direct them to meet the requirements of fertiliser manufacturers in the country. He also says that the arbitration clause in the contract would emphasize the fact that the assessee alone was responsible for the import of goods. He further points out that the responsibility of the assessee starts once the goods are on board the ship. SPIC Ltd., has no nexus with the foreign seller. According to him, the licence is in favour of the assessee, the bill of lading is on the assessee and all documents are in favour of the assessee. He, therefore, argues that the conclusion of the authorities that there was a local sale by the assessee to the SPIC Ltd., is perfectly correct. He refers to [1975] 36 STC 136 (SC) (Mod. Serajuddin v. State of Orissa). This case has already been distinguished by the Supreme Court in State of Maharashtra v. Embee Corporation [1997] 107 STC 196. He relies on [1989] 72 STC 29 (Minerals and Metals Trading Corporation of India Ltd. v. State of Andhra Pradesh), wherein the Andhra Pradesh High Court held on facts that the canalysing agent, State Trading Corporation was not acting as an agent of the actual user. In that case, they found that the title to the goods passed on to the canalysing agent after unloading of the goods at Visakhapatnam Port and sale in favour of the actual user took place thereafter. The facts in our case are totally different as adverted to by us earlier. [1992] 84 STC 544 (Mysore Chemical Supplies v. State of Tamil Nadu) is a judgment of the Madras High Court and the decision is riot helpful to the Revenue, because ultimately the Madras High Court remanded the case back to the Joint Commissioner to decide the issue on factual details. [1993] 90 STC 283 (K. Gopinathan Nair v.State of Kerala) is the decision of the Kerala High Court, which was affirmed in K. Gopinathan Nair v. State of Kerala [1997] 105 STC 580 (SC), to which, we have already made a reference and we have shown how the facts are different. [1994] 93 STC 159 (Hindustan Motors Ltd. v.State of Tamil Nadu) is a judgment of the Madras High Court, wherein it was held on facts that the privity of contract was between the State Trading Corporation and the foreign buyer and the immediate provocation for the movement of goods was the contract between the foreign buyer and the State Trading Corporation. The foreign buyer had nothing to do with the supplier of goods to the State Trading Corporation. There were no materials to show that there was any relationship of principal and agent and according to the Madras High Court both the supplier and the State Trading Corporation were two separate principals. Finally, Mr. R.Mahadevan refers to a division Bench judgment of the Special Tribunal, wherein only the question of the relationship of principal and agent was discussed. That case had nothing to do with import of goods.
Factually, it was found that the assessee purchased goods out of his own funds and the goods were in his possession and after several days, he passed on the goods by sale to ultimate buyers in Coimbatore. Facts are clearly distinguishable, especially, with reference to the interpretation given by us to the modus operandi in making a joint import on behalf of the assessee and SPIC Ltd. 20. We have given our anxious consideration to the several decisions cited on behalf of both the parties. We are clearly of the opinion that the binding authorities of the Supreme Court are uniform in nature and they point out that the transactions in this case are inextricably connected with one another and that joint transaction alone was the immediate provocation for the import of the goods. In our opinion, on both the points, the assessee should succeed. There are enough materials to suggest that the assessee imported the goods as agent of SPIC Ltd. The contract itself refers to this aspect and the foreign seller was informed about the ultimate user, namely, SPIC Ltd. The repeated assertions by the authorities below that the assessee imported the goods and thereafter had a right to supply the goods to any of the fertilizer manufacturers, are not borne out by facts. It was a joint purchase by the assessee and SPIC Ltd., and they had unity of title, possession, time and interest. Going by the interpretation given in the Halsbury's Laws of England and the Corpus Juris Secundum, if there was title in both the assessee and the SPIC Ltd., till it was partitioned at the time of delivery at Tuticorin Port, then where is the question of the assessee selling the goods to SPIC Ltd. So far as payment for the imported goods is concerned, no doubt, the assessee paid the same through bank. But, here again, the authorities make a vital mistake in thinking that the assessee acquired title immediately on the goods being loaded in the ship. They forget the fact that there is a 45 days period for retirement of the bank documents which would indicate that the assessee never acquired title immediately on the loading of the goods in the ship.
21. Another mistake committed by the authorities is that they make a facile assumption that the debit note was raised by the assessee on SPIC Ltd., and in the guise of collecting service charges, the assessee received the same consideration.
22. There is yet another mistake in thinking that the goods were imported not only for SPIC Ltd., but three others. One cannot understand what difference this makes. The fact remains that the goods were imported for the disclosed principal, SPIC Ltd., and the goods meant of them were unloaded at Tuticorin Port. Necessarily, the entire goods cannot be unloaded and the only goods meant for SPIC Ltd., could be unloaded at Tuticorin. In our opinion, this does not make any difference so far as the arguments of the learned counsel for the petitioner is concerned. In our opinion, such an inference can never be drawn on the facts and circumstances of the case. There was absolutely no reference to any profit-motive and only service charges were collected. We have to give a plain meaning to the words "service charges" and to the words "import on behalf of SPIC Ltd." If such a plain meaning is given, the intention of the parties is made clear, namely, the assessee imported the goods as agent of SPIC Ltd. and for the services rendered, they collected 1.5 per cent of the C & F value from the year 1970.
23. We have said enough to show that the authorities below have acted illegally in drawing inference where there are no materials at all. We accept the argument of the learned counsel for the petitioner on both the points, namely, that the assessee acted only as agent of SPIC Ltd., and even assuming that there was a separate transaction between the assessee and the actual user, SPIC Ltd., it was so inextricably connected that the joint purchase which resulted in the import of the goods. Consequently, there was no sale by the assessee to SPIC Ltd., warranting levy of tax under the TNGST Act, 1959. Having come to this conclusion, there is no necessity for us to discuss the issue of penalty, because it will not arise at all. The tax revision case is, therefore, allowed in entirety and the orders of the Appellate Tribunal confirming the orders of the assessing authority and the Appellate Assistant Commissioner, are set aside.
And this Tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 8th day of February, 2001.