Delhi High Court
Sita Juneja & Associates And Others vs The Commissioner Of Sales Tax & Ors. on 22 September, 1998
Author: R.C. Lahoti
Bench: R.C. Lahoti
ORDER C.K. Mahajan, J.
1. This common order shall govern the disposal of CWP 1932/98 M/s. Sita Juneja Associates & Ors. Vs. CST, 3154/97 Shri Krishna Engineering Company Vs. CST & Ors. and 3606/97 S.K. Jain Proprietor M/s. Puran Chand & Ors. Vs. CST & Ors.
2. The three petitioners are dealers registered under the provisions of the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956. They have effected certain sales occasioning movement of the goods in the course of export sales from India to Nepal which according to them are not liable to levy of sales tax but have been so subjected in view of certain administrative circulars issued from time to time by the Commissioner of Sales Tax. The three petitioners seek quashing of such circular orders and the orders of assessment based theoreon.
3. M/s. Sita Juneja Associates, the petitioner in CWP 1932/97 had returned an amount of Rs. 5,22,879/- as sales by way of exports to Nepal which claim has been rejected and the figure included in the sales of the petitioner taxable @ 12% during the year 1994-95 vide order of assessment Annexure-C.
4. Shri Krishna Engineering Co. the petitioner in CWP 3154/97 made a similar claim of export sales having been made to Nepal for the period of assessment 1992-93 which has been disallowed and the figure included in the sales liable to tax vide assessment orders Dated 27.3.97 Annexure-D collectively.
4.1 For the purpose of completing the assessment for the year 1992-93 the petitioner was asked to produce documentary proof of export to Nepal. through land frontier. The petitioner approached the office of the Additional Commissioner of Customs, Muzafarpur, who vide letter dated 28.4.1997 informed the petitioner that for documentary proof export to Nepal through land frontier the petitioner may obtain certificate from the respective land customs station from where the goods had crossed the Indian Border and entered Nepal.
5. S.K. Jain, proprietor of M/s. Puran Chand and Sons the petitioner in CWP 3606/97 claimed deduction of a figure of sales of Rs. 3,11,466/- shown as exports made to Nepal during the period of assessment 1993-94 which has been disallowed and the Sales taxed @ 10% vide order of assessment Annexure P-2 (Colly.).
6. Why the sales made by different dealers by way of export to Nepal are being taxed is on account of a few circulars issued by the Commissioner of Sales Tax, New Delhi. The relevant part of the three circulars is extracted and reproduced hereunder:-
6.1 OFFICE OF THE COMMISSIONER OF SALES TAX BIKRIKAR BHAWAN: MSQ- II. NEW DELHI-2 F.No. 3(32)/92-PPR/PF/660-6838 Dated : 4.6.96 Circular No. 10 of 1996-97 To All Assessing/Appellate Authorities, Sales Tax Department, New Delhi.
Reg: Verification of Export Certificates issued by the Govt. of Nepal and Bhutan in respect of claims for Sales tax exemptions.
In Suppression of all previous instructions of the subject, all assessing authorities are, hereby directed that following instructions shall be kept in view while considering claim of export to Nepal and Bhutan shown by the dealers ;
(i) The Assessing Authorities must ensure that alongwith the claim, the Assessee submits Bill of Exports [in respect of exports by road, shipping bills (in respect of sales made by air)] issued by the concerned land Customs Stations/Port/Airport notified by the Custom Deptt. of Govt. of India.
(ii) The Assessing Authorities shall also ask for proof of payment in respect of such claims made by the dealers.
(iii) In all those cases were claims exceed Rs. 10 lacs as a measure of abundant precaution, claims shall be considered only after making filed enquiries through Ward Inspectors/Enforcement Branch.
Sd/-
(B.P. Misra) Commissioner : Sales Tax Delhi.
6.2 OFFICE OF THE COMMISSIONER OF SALES TAX BIKRIKAR BHAWAN: MSO-II, NEW DELHI-2 F.No. 3 (32)/92-PPR/PF/17791-18064 Dated :7.2.97 Circular No. 14 of 1996-97 To All Assessing/Appellate Authorities, Sales Tax Department, New Delhi., Reg. : Verification of Export Certificates issued by the Govt. of Nepal and Bhutan in respect of claims for Sales tax exemptions xxxxx xxxxxx xxxxxxx xxxxx xxxxxx xxxxxxx
9. Taking all these into account the proof that an Assessing Authority needs to ask the dealer to file are listed below:-
(i) RBI Code No. of the ;
(ii) Import Export Code No. of the Exporter;
(iii) Description of goods;
(iv) Amount of export, value realised, Bank Certificate number and date of realisaton;
(v) Name and full address of the buyer;
(vi) Shipping bill/bill of Export No. and date of certificate of Custom Officer certifying that the goods have crossed the frontier of India;
While all these proofs are important the most important is the last one i.e. the certificate of the custom officer certifying that the goods have crossed the customs frontiers of India into Nepal or Bhutan.
10. Therefore, the Assessing Authorities are to ensure that these documents are supplied by the exporters. Certificates from Nepal or Bhutan Govt. Authorities cannot be taken into account as they are issued by a foreign government and cannot be cross verified.
11. No other circumstantial evidence can be accepted particularly in the absence of certificates of India Customs Authorities. Similarly the proof of receipt of payment which underscores that India has not lost out in the process is the other substantial proof.
sd/-
(B.P. Misra) Commissioner: Sales Tax.
6.3 OFFICE OF THE COMMISSIONER OF SALES TAX BIKRIKAR BHAWAN: MSO-II, NEW DELHI-2 F.No. 3(230)/92-PPR/1275-1548 Dated :13.5.97 Circular No. 2 of 1997-98 To All Assessing/Appellate Authorities, Sales Tax Department, New Delhi., Reg. : Verification of Export Certificates issued by the Govt. of Nepal and Bhutan in respect of claims for Sales tax exemptions.
Queries have been raised from some of the Assessing Authorities whether or not to allow the claim of export on the basis of certificates issued by the Custom Authorities of Nepal & Bhutan.
xxxxxxx xxxxxxx xxxxx xxxxxx In view of the aforesaid three circulars regarding allowing claim of exports to Nepal and Bhutan, the final position which emerges is given in para 9 of Circular No. 14 of 1996-97 and the same is reproduced as under for the convenience of all the Assessing Authorities.
"Taking all these into account the proof that an Assessing Authority needs to ask the dealer to file are listed below:
(i) RBI Code No. of the Exporter;
(ii) Import Export Code No. of the Exporter;
(iii) Description of goods;
(iv) Amount of export, value realised, Bank Certificate number and date of realisation
(v) Name and full address of the buyer
(vi) Shipping Bill/Bill of Export No. and date of certificate of Customs Officer certifying that the goods have crossed the frontier of India.
While all these proofs are important the most important is the last one i.e. the certificate of the Customs Officer certifying that the goods have crossed the Customs frontiers of India into Nepal and Bhutan.
Assessing Authorities are, therefore, directed to keep in view the aforesaid instructions while examining the claim of export to Nepal and Bhutan. Any deviation in this regard will be viewed seriously.
sd/-
(B.P. MISRA) Commissioner Sales Tax Delhi
7. According to the petitioners, in order to substantiate their claim for non-liability to tax in respect of such transactions of sale as have occasioned export of goods to Nepal, the dealers are producing complete books of accounts, copies of the bills/invoices, copies of the goods receipts issued by the transporters, certificates from the Transporters/Chartered Accountant certifying that the goods have been so transported and have been delivered to the purchasers at the destination in Nepal, photo copies of Form-34 issued by tax authorities, certificate from Customs Authorities and Government of Nepal verifying the goods having been duly delivered into Nepal. But such evidence though reliable and worthy of credence is being discarded by the assessing authorities because they insist on the documents being produced only in accordance with the above said instructions issued by the Commissioner of Sales Tax and in the event of their failure to fulfill the directions contained in the said circulars the assessing authorities simply refuse to look into the evidence as above said. They do not even apply their mind if the documentary evidence made available by the dealers as above said is sufficient to satisfy them of exports to Nepal having been really made by the dealers.
8. With regard to the Reserve Bank of India export Code No. it was submitted that for export to Nepal no foreign exchange is involved and therefore no code No. was required from the R.B.I. with regard to the certificate from the Indian Customs Authorities, it was pointed out that the goods were sent through transporters who in turn have the goods cleared and delivered to the purchasers in Nepal. The tax authorities of the State of U.P. through which the goods have to pass while moving from Delhi to Nepal, have certified the goods having entered into the State of U.P. In transit and left the State of U.P. at the Indo-Nepal Border at Sunauli Maharajganj. It is further submitted that the dealers are producing certificates issued by Customs Officer of His Majesty's Government of Nepal which set out the bill numbers and other particulars and certify the goods mentioned in the bill having being imported into Nepal by the dealers named therein and having been duly delivered thereat. Even such certificates are not considered.
9. The petitions have been opposed by the respondents. It was contended that to claim exemption under Section 5(1) of the Central Sales Tax Act, the onus was on the dealers to show that the goods had actually been exported and that such sale had occasioned export. As to the circulars it was contended that they were merely guidelines for the Assessing Officers. There are 17 check posts notified on the Indo-Nepal Border and it had come to the notice of the respondents that traders were indulging in malpractice and without actually exporting the goods were claiming the benefits available to them in respect of export of goods to Nepal. It was in these circumstances that the circulars were issued and in any event, there is nothing wrong in asking the exporters to produce certificate from the Indian Customs Authorities.
9.1 For the respondents reliance is placed on Section 2(ab) of the Central Sales Tax Act, 1956 which reads as under:
"Crossing the customs frontiers of India" means crossing the limits of the area of a custom station in which imported goods or export goods are ordinarily kept before clearance by customs authorities.
Explanation: For the purposes of this clause, "Customs station" and "Customs authorities "shall have the same meanings as in the Customs Act, 1962 (52 of 1962)."
9.2 Reliance was also placed on Section 7(1)(a) of the Customs Act. Attention of the Court was also invited to Section 50 and 51 of the Customs Act, which read as under:
(50) Entry of goods for exportation : (1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported by land, a bill of export in the prescribed from.
(2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration to the truth of its contents.
(51) Clearance of goods for exportation: Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any assessed thereon and any charges payable under this Act in respect of the same, the proper office may make an order permitting clearance and loading of the goods for exportation.
9.3 Attention was also invited to the Shipping Bill and Bill of Export (From) Regulations, 1971 wherein it is provided that Bill of Export is to be presented by an exporter of goods in the forms specified in the Regulations.
9.4 It was submitted by the learned counsel for the respondents that in view of the above said provisions and the procedure laid down by the Customs Department for dealing with the goods crossing the Indo-Nepal Border it should not be difficult for the petitioner to obtain documentary evidence in proof of such exports from India to Nepal covering sales transactions in respect of which the exemption was being claimed.
10. The learned counsel for the petitioners submitted that in framing the assessment, the assessing authority mechanically followed the directions of the Commissioner without considering the material placed on record. He further contended that by issuing directions and instructions to the Assessing Authorities and Appellate Authorities under the Act through the aforesaid circulars the Commissioner of Sales Tax was interfering in the exercise of the statutory powers and functions of the authorities which are quasi-judicial in nature. The Assessing Authorities under the law are quasi-judicial authorities who are duty bound to examine each case on its own facts. If in law a sale has been effected in the course of export out of India, then the respondents cannot impose or levy a tax upon the said transaction as the same is not liable to tax. The circulars, giving directions without sanction of law, result in mechanical levy of tax on export transactions contrary to the Delhi Sales Tax Act and the Central Sales Tax Act, and the Constitution of India. He further contended that assessments made on directions and instructions or advise from superior officers is vitiated.
11. To appreciate the contentions of the parties, it is necessary to examine the relevant provisions of law.
11.1 Article 286 of the Constitution reads as under:-
"286. Restrictions as to imposition of tax on the sale or purchase of goods;
(1) No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place -
(a) outside the State; or
(b) in the course of the import of the goods into or export of the goods out of the territory of India.
(2) Parliament may be law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1).
(3) Any law of a State shall, insofar as it imposes, or authorise the imposition of-
(a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or
(b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29-A) of Article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by-law specify.
11.2 Section 8 of the Delhi Sales Tax Act reads as under:
"Certain sales and purchases not liable to tax.- Nothing in this Act or the Rules made thereunder shall be deemed to impose, or authorise the imposition of a tax on any sale or purchase of any goods when such sale of purchase takes place:
(i) In the course of inter-State trade of commerce; or
(ii) Outside Delhi; or
(iii) in the course of the import of the goods into or export of goods out of the territory of India.
Explanation: Section 3, 4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining whether or not a particular sale or purchase takes place in the manner indicated in clause (i) clause (ii) or clause (iii) of this section.
12. From a reading of the aforesaid provisions, it is clear that the sales in the course of export of goods out side India are not liable to tax. No law of a State can authorise imposition of tax on such sales. There is no provision in the Constitution, Central Sales Tax Act and Delhi Sales Tax Act or in the rules made thereunder laying down any particular or specific mode of proof for determining claim of non-liability to tax on transactions involved in export of goods outside India. The assessee can establish export of goods outside India by adducing evidence such as the agreement or contract or order placed by the foreign supplier, or the bill/invoice of the document or the despatch documents, namely railway receipt/goods receipt of transporters or airways bill from the airlines, or Bill of Lading and so on which would enable the assessing authority to reach a conclusion that the sale was in the course of export of goods. It will be futile to attempt an exhaustive list. What documents would be enough to appeal to the sence of judgment of the assessing officer would differ from case to case depending on myriad situations. Once it is established that the goods were exported out side India then by virtue of the aforesaid provisions no tax can be imposed on such a sale as was in the course of export outside the country. In the circumstances, any circular prescribing a particular certificate or issue of instructions to subordinates to insist on production of a certificate which alone would be admissible for proof of export sale would be violative of the provisions of the Constitution, the Delhi Sales Tax Act and the Central Sales Tax Act.
13. The expression "in the course of export or import" as referred to in Article 286 means any sale or purchase which itself occasions the export or import of the goods, as the case may be, out of or into the territory of India. A sale by way of export involves a series of integrated activities commencing from the agreement of sale with the foreign buyer, ending in the delivery of goods to any carrier for transport out of the country by land or sea and resulting in transfer of title in the goods beyond the borders. Such kind of sale cannot be disassociated from the export without which it cannot be effectuated and the sale and the resultant export from part of a single transaction. The liability to tax flow from the charging section of the taxing statute. The export sale of commodities to foreign buyer on CIF or FOB basis fall within the scope of the exemption.
14. We have heard the learned counsel for the parties at length. We are inclined to accept the contentions raised by the petitioner. We have considered the several assessment orders passed by the Assessing Authority. It is stated in the order that the Assessing Authorities have been advised to ask the dealers to file the certificate of custom officer certifying that the goods have crossed the frontiers of India, along with the other documents like the RBI Code number of the Exporter, Import Export Code No. of the Exporter, description of goods etc. The dealer/petitioner was required to furnish the requisite certificate from the Customs Authorities in accordance with Circulars and since the dealer was unable to produce the requisite certificate, the claim for deduction on account of the export sales was disallowed. The Delhi Sales Tax Act and the rules, the Central Sales Tax Act and the Constitution of India, do not prescribe any particular declaration/certificate only being accepted as evidence for establishing export. Insistence on a certificate from the Indian Customs Authority as the only acceptable piece of evidence while ignoring all the other evidence on record and denying relief to the assessee is without sanction of law and is, therefore, liable to be struck down.
15. The officials of the Sales Tax Department are administrative authorities. However, such of the officials as are vested with jurisdiction to assess the business transactions of the dealers to tax, discharge function which is judicial in nature. The function though administrative is obliged to be performed with judicial approach and hence becomes quasi-judicial. The basis requirements of justice have to be complied with. Rules of natural justice have to be followed. Objectivity has to be maintained. The conclusions arrived at by the assessing authorities have to be based on the material available on record and supported by reasons.
16. Whenever judicial or quasi-judicial power is vested in a person, the decision must be his. Even though he may obtain the assistance of other persons, he cannot be influenced by anyone in coming to the decision. In short, the jurisdiction so conferred can be either be tempered nor tinkered.
17. Can such jurisdiction, that is, the jurisdiction to assess to tax, be controlled, regulated or influenced by circulars containing instructions issued by the superior officers?
18. In Orient Paper Mills Ltd. Vs. Union of India 1978 (2) ELT (J 382) their Lordships of the Supreme Court have held that the assessing authorities under various taxation laws exercise quasi-judicial Junction. The duty cast on them is to act in a judicial and independent manner. If their judgment is controlled by the directions given by the Collector it cannot be said to be their independent judgment in any sense of the word.
19. Recently in Collector of Central Excise, Bombay Vs. Kores (India) Ltd. their Lordships have held that a quasi-judicial body exercising quasi-judicial power was not bound by the directions of the Central Board of Excise and Customs.
20. In State of Madhya Pradesh Vs. G.S. Dall and Flour Mills, (1991) 187 ITR 478, their Lordships have held "Executive instructions can supplement a statute or cover are as to which the statute does not extend. They cannot run contrary to statutory provisions or whittle down their effect".
21. In Bengal Iron Corporation Vs. CTO , referring to the provisions of Section 37-B of Central Excises Act, 1944 and Section 42(2) of Andhra General Sales Tax Act their Lordships have held that clarifications and circulars issued by the Government represent their under standing of the statutory provisions. The Government is bound by them by not the courts and the authorities acting in quasi-judicial capacity where at they are bound by-law and not by administrative instructions, opinions and clarifications. Nothing would prevent has State from recovering the tax if in truth such tax be leviable according to law, their being no stopple against the statute.
22. Under Section 37-B of the Central Excises Act, 1944 the Central Board of Excise and Customs may issue orders, instructions and directions to the Central Excise Officers. In Orient Paper Mills Ltd. Vs. Union of India, (1978) 2 ELT (J 345), their Lordships have held that a quasi-judicial power cannot be controlled by the directions issued by the Board. No authority, however high placed can control the decision of a judicial or a quasi-judicial authority. That is the essence of our judicial system. Their Lordships have also quoted from Mahadayal Premchandra Vs. CTO, Calcutta & Anr., where in Assessing officer acting on the basis of instructions from superiors was held to have vitiated the entire proceedings. Their Lordships have further held:
"That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authority in the matter of deciding disputes between the persons who are called upon to pay duty and the department. It is true that the assessing authorities as well as the appellate authorities are judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the direction given by other. Then it is a misnomer to call their orders as their judgments; they would essentially be the judgments of the authority that gave the directions and which authority had given those judgments without hearing the aggrieved party."
Their Lordships made it clear that the only instructions that the Board can issue can relate to administrative matter: otherwise they will be ultravires.
23. Following the above said decision, the High Court of Gujarat has held in Genset Engineers Pvt. Ltd. Vs. Union of India 1989 (43) ELT 24 that the general instructions given by the Board bind the officers only when they act in their administrative capacity and do not bind the authorities in discharge of their quasi-judicial functions.
24. Section 119 of the Income-tax Act, 1961 authorises the Central Board of Direct Taxes to issue orders, instructions and directions to subordinate authorities. A Division Bench of this court in M.P. Tewari Vs. Y.P. Chawla. I.T.O. & Ors. (1991) 187 ITR 506 held:-
"Such instructions issued by the Board cannot take away the judicial or quasi-judicial junctions of the Commissioner, nor can dilute the discretion of the Commissioner which has been conferred by the statute."
25. Consistent view of the High Court of Delhi has been that a quasi-judicial power cannot be controlled by the directives issued; instructions can be issued only relating to administrative matter. The superior authorities can bind down the subordinate authorities in their functioning on the administrative side only but not in the discharge of their quasi-judicial functions. Good Year India Ltd. Vs. Union of India ITC Ltd. & Anr. Vs. Union of India & Ors. , Indian Aluminum Company Ltd. Vs. Union of India 1983 (12) ELT 349 (Del.) Madras Rubber Factory Ltd. Vs. Union of India 1981 (8) ELT 804 (Del.): Appollo Tyres Ltd. Vs. Union of India 1980 (6) ELT 428; Madras Rubber Factory Ltd. Vs. Union of India 1979 (4) ELT (J 173).
26. So is the view taken by the High Court of Madras in Ponds India Ltd. Vs. Collector of Central Excise 1993 (63) ELT 3 Madras.
27. In Delhi General Sales Tax Act, there is no provision which authorises the Commissioner of Sales Tax to issue such instructions as may bind the assessing authorities in discharge of their adjudicator functions. During the course of hearing, we have asked the learned counsel for the respondents to show the source of power where from the impugned circulars have originated. The learned standing counsel submitted that there was no specific statutory provision as such, but the instructions were issued under the general administrative power vesting in the superior officers in the hierarchy of the system and were issued for safeguarding the public interest and the interest of the revenue in as much as large scale evasion of sales tax in the name of export transactions was brought to their notice. How so ever laudable may be the intentions of the Commissioner of Sales Tax, we are very clear in our mind that such instructions could not have been issued as take away the discretion vesting in the assessing authorities discharging quasi-judicial function of making assessments.
28. It may be that large scale evasion of Sales Tax by unscrupulous traders was brought to the notice of the Commissioner of Sales Tax, who on the information made available to him formed an opinion that the traders were attempting to convert local sales or intra-state sales into sales in the course of export. Attention of the assessing authorities could have been invited to this phenomenon cautioning them to be on their guard against such attempts and design. The assessing officers having become aware of such attempted evasion would have then dealt with such cases with requisite care and caution so as not to be led away by what is apparent and would have been persuaded to make cautious enquiries. In spite of applying a higher standard of proof if an assessing authority was in an individual case satisfied of genuineness of the transaction as pleaded before him, de hors the documents mandated to be filed by the circulars issued by the Commissioner of Sales Tax, then there is nothing wrong in the asessing authority accepting the claim of the trader in an individual case.
29. We can appreciate the difficulties of the department but that tug of war between the tax collector and the tax payers is as old as the origin of tax itself. The learned counsel for the petitioners submitted that the petitioners in these cases were not claiming the benefit of any exemption or exception in which case the onus of proof would have been on the dealers. The question in this case is liability of the dealers to pay tax on the transactions entered into by them for which the onus lies on the department and not on the assessee. If free export is permitted between India and Nepal then there is nothing wrong in the State Govt. or Govt. of India taking up the issue with the Govt. of Nepal at diplomatic level so as to find and devise procedure for certification of the goods imported into Nepal and exclude the possibility of such false certificates being issued or brought into exist once which purport to have been issued by the officials of Nepal Govt. So also the Sales Tax Department can at higher level devise some system and lease with the customs department so that the informations as to such goods is available intra-department without driving the individual assessees to over around the officials of the customs department in search of documents. The fact stated in para 4.1 above suggests how difficult it would be for an individual trader in the year 1977 to collect the information referable to the year 1992 from the Customs check post situated at the Indo-Nepal border.
30. The adjudicator discretion vesting in the assessing authorities cannot be bound down by the dictates from the superiors if not so warranted or permitted by the statute. The assessing authorities should be left free to active at findings from case to case depending on the reality and accept-ability of the material brought on record of each individual case. To put it in the context of the cases at hand, the assessing authority could not have been obliged to hold the goods having not been exported to Nepal solely for non-production of the requisite certificate from the Indian Custom Officers; even in the absence of such certificates the assessing authority should not have been inhibited from holding the sale transactions to be export sales if on the material available and brought on record by the assessee it was possible to hold so.
31. To sum up, the Commissioner of Sales Tax being so placed in the hierarchy of the department can issue instructions to his subordinates but in the administrative field only. No provision in the law of sales tax has been brought to our notice by the learned counsel for the respondents equivalent to or pari materia with Section 37B of the Central Excises Act, 1944 or Section 119 of the Income-tax Act, 1961. There is nothing wrong if the Commissioner of Sales Tax issues such circulars which bring to the notice of this subordinates things like changes in legislation, law declared by the Supreme Court, binding precedents laid down by the High Courts and so on, so as to enlighten them and keep them abreast of the developments in the field of law so as to avoid committing errors. On ticklish issues generally arising before the subordinates the Commissioner of Sales Tax may suitably guide or advise them with a view to lending a helping hand. But the Commissioner of Sales Tax cannot issue such circulars or instructions as interfere or intermeddle with the exercise of statutory power or statutory discretion vesting in the subordinates in judicial or quasi-judicial arena. To issue such circulars is crossing the limits and entering the forbidden frontiers. The use of such language in the circulars as has been highlighted by us in sub-paras of para 6 above has the effect of binding the assessing authorities in exercise of their statutory powers and discharging quasi-judicial functions and therefore cannot be sustained.
32. We are satisfied to hold that the impugned circulars issued by the Commissioner of Sales Tax are ultra vies his jurisdiction. They must be set aside and so must be set aside the assessment orders based thereon.
33. While framing the impugned assessments, the transactions have not been examined to see whether they are in fact sales in the course of exports out side India. Mere failure to produce the certificate from customs have invited levy of tax. The evidence adduced in support of the export sales has been discarded following the dictates of the circulars. The claims for deduction were disallowed only on the ground that the dealers had not been able to file the requisite certificates from the Indian Customs Authority.
34. The contract of sale with the foreign buyer under which goods may be delivered by a seller to the common carrier would amount to a sale in the course of export. The test of export is that the goods must have foreign destination and the movement of goods across the border under a covenant in the contract/agreement. The petitioners have been fastened with the tax liability in respect so sales in the course of export of goods outside India which are otherwise not liable to tax under Article 286 of the Constitution, Section 5 of the Central Sales Tax Act and Section 8 of the Delhi Sales Tax Act. The respondent No. 2 was influenced by the directions issued by the Commissioner of Sales Tax requiring production of certificate from Indian Customs Authorities. The respondents failed to appreciate the entire procedure of export from India and import into Nepal. Without insisting on production of certificate they ought to have made assessments on the basis of the evidence of export adduced by the petitioners. To disentitle the petitioners to exemption claimed on the sole ground of non-production of certificates from Indian customs vitiates the assessments.
35. All the petition are allowed. The impugned three circulars set out in paragraphs 6.1, 6.2, and 6.3 above are hereby quashed and set aside being ultra vires the authority of the Commissioner of Sales Tax. Consequently, the order of assessment for the year 1994-1995 (Annexure-C collectively) in CWP 1932/98, orders of assessment for the year 1992-93 (Annexure-D, colly,) in CWP 3154/97 and orders of assessment for the year 1993-94 (Annexure P-1 and P-2) are also hereby quashed and set aside. The assessing authorities shall take up the assessments of the petitioners for the said periods afresh and frame orders of assessment consistently with the observations made in this judgment. No order as to the costs.