Karnataka High Court
M/S. Mitsubishi Corporation vs The State Of Karnataka on 29 September, 2011
Bench: N.Kumar, Ravi Malimath
iN THE HIGH COURT OF & Dated inis the 2O THE HON'BLE MR. JUSTICE N.KUMA? AND." THE HON'BLE MR. JUSTICE RAVI MALIMATH SF 20LLT-RES) STRP NOS.168-169/201i: BETWEEN: -- oo LOR ae > on Corporation, another member ah For assembly of the propulsion, the Consortium had- entered - Consortium delivered CK their factories at 4 issue materials .ic ns? assengel € ine p eee ore € ore oh e PPS 1 ; seed Ppt Kawet po boot fat SAPS .
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an 'cut 'oon eee "ret an dove : acd eh we . pet "; ai Sew! a na ub we * ory Q Nae? rh, te ~-- - a, sg ce Sdn ? wend dowt >" ed Fate ree ep ee a, Saunt ; ip ;
set an * a pod ind -- That A . ais ea nti pina Nhe Sal fy f purwoet ay pi Sean pos panes haa 7 ae Fo » : Sai f et i son, "er fa ue sie .
~ wie ne! font :
: £3 erro a out eee tty Spee See * ay : aa =r ino aa on 'pn sn om : af : ce ; vo ree a spe jews sj a) : puna ued "td po a . span Cla, a ma me a Sha! onal oy seer had Ne! poe shins ot fa Mae "sae! dion oe cron) ot pat wd aoe ' "ont boas as + sn ; nord as we fe ft whan . ee! wi sed ae ee "heel te oF Sy? soe a ke - om "ee ue ci _ ye Hs a, a ond octns "ond od and aa -_ # & : SC Sb 6 = 5 cont . fo oi met put peat ie ae Saad pong : me a ye an me a e wo oe "i inl a we tL ie ive int va os, fed ; ; Co , 7 mm Fe eee A £ , dt on ra Shel shore a) Naw al es] pel ee Hy q ral a Saat end a ve 4 opal pet a yun 'ha wee yb "deer inte a nate ae 'eat 4 a poo ood? spon "jel " gelan or
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eS ane espe 'ale os, f eek necessary LO look inferpretation placed Amendment, Articles 260 hnenl consequ Poopurchase ¢ fo oF 2 Ba! EYEE OF COT rifer-sial 1rce, hae 4 'ride i a & of = = Wa OF LEN l above ust EL RETICLE {i} The Central CGoverrnment purchase Of goods ip ine course of e-sidies the Ceriral sbepy and collect ihe tax and dor tlds plirpose prescribe purpose of defining tt detail relative jurisdiction, firstly of the fog mud secon esfere FPiRer $e.
necessary tnat the i aut etre ny on rome Poa BERS AAS e OE Z 2 SSSI DI RCL RES CHILE O ie Eas Se OR mi) on pew Tepe sod 4 Sa! fa Nae Py nse? Nad og 2
- 'a i ne ond o ai ll os foot She me "ad oh Pod RP} a * shat one cc wal bee o ine fon.
a pine Sn sad a .
pd up am Sa ra os sat a ey Ma we : we rn, ' a wy Ta pus 'le "iu an wee Ny Nil » 7 ve Paes tt oft Saal Saad ae ho oe ae a pe Bond hs ' ne And ong pat So haan iad ne he f CETL io asters sc ol (2) [Notusthstardina i the course of inter- State trace or commerce fas either o such goods from one State earn ler OF. has DET fo Stich ip nisvonot' froma one State fo subsequent. sale .dirtng such ted by @uvansier ef documents of goods are of section tiuiless furnishes lo the prescribed anitheoritiy i the preseribed meapriner eeried fine or Laithin such fs ES LE .
L na a 4 ie Oe oe ie es ae Pag ta Me ?
regis erred 2 ref é if Ice 5 leclaration or the certt ee Bp 29 generally or is subject to tax generally ala rate which is lower than four. per :
f (whether called a tax or fee.or by.
aru oiher ame}: and (bp) the dealer € effec fing such h subsequent stiles praves (9 ine satis fie Hor of. the. a auihortiy re ferred. to in the. preceding proviso that such sale i is. Of the neiire referred te in € clause(a) oF. clause fb) of Enis sub- see ctian.
By Notwithstanding a anylitnig : ja anu offic igi OF per sonnel of-
(any _Soreign diplomatic mission or consulate in NIGiG: OF "GY ihe - United Nations or any other simile ar international body, eviiiled to privileges under any convention fo uwhien India is @ party or under any law jor the lime bewig in force: or tb) amy consular or diplomatic agen of aru mission, the United Natioris or other bocdy referred. to in sub clausefi) or sup-clouse fl of clause fa), wee a ° Sree ae Sata CASe OF a Se fheip mopement from one State weg hey gree bya ep ey ge ¢ Ea, sale siupsequen? fo the same goods and being ¢ evied arid collected-
fa) Where such bu a registered Atak, i opkairied ay sub section (4:
L Copernmenh af
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oy open eben ode gewlen GP C]OCHIS LIP TAG.
SEN TES ee ins Government may. by res mmcée moke riecessary provision for riuailer (2A) All fhe provisions reualing fo and penalties [incline "OLISIORLS reid We fora pe GAL te s relating to ns TO-and LOA) of the assessment ction and ihe en forceme ih such assessmeni esl for delayed 1 Sat Nad COMPANY LIMITED, BOMBAY us S.R_S R AND OTHERS "BY Section GS. a saie-or purchase of goces ts eemed to take place in the course fade or conunerce if the -scle 'ar a occasions the movement Orie Dleile fo (heir mov i Sales: Tap property, Siciie fo aruofnier is 2 eMac OF sale, of de when the goo
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a tha! one on Joa, bs Mevet?
a pot fon ee a nn, 3 ae SE ASR se i lo another. in. respect of an inter-Steite sale.
pauses is lemable only e8 Ob Section 3 are iri 'ale! Seal of A Sale taxaide as felling u
25. In the case. of GIL. INDIA LIMITED vs SUPERINTENDENT OF TAXES AND OTHERS [1975 (1) SOC DCCESIONS movement of Yyoouds frorre arte "OR. Mecesscriy thar "Ee St "in the course of inter eommerce, iat g Wier Sicie mouerverif awe"
ER SE res Ce DEE BS movement was i pursuance of and incidental ja.
the contract of sale. If the movernent of go from one State io another is the result.of. a.
COUeTLULE OF art incident of ffpe conirack oc.
ther. (he saie is an iiter-State sale."
sex Court 26, Following the af in the case of UNION "OF INDIA.AND ANOTHER vs K.G.KHOSLA AND. COMPANY. LIMITED. [1979 (2) SCC 242] OCCASIONS explaining Une ines ihe movement, of ge another has held as Lirider:-
apermenis that Beet a ee Pgeey gee fe. i Hois.cleem from the = sired bu respondent I in its Wi pursuance Of Loffice at Deikt. Pat Delhi and in pursuance: Of those contracts, rere tured at Faridabad according ic edahons rieniligoned in ine contracts. This.
s UW Mype Of case in ii the general course of SOI Be ee ene 7 recetved by the reiriuafeact Cornracts of sales were fi ease abt Delhi and Taridahad in mursucnee of thase RL "Leth the Goods -Lvere ne OMIOrS © cer stonce and = COP ms 2 Peridaberd.
Mie Goods: £0 Dethi was bul a convenient more oO} COME aCTS ESOS eee etree we SASS them fo the purchasers.
nods was occasioned fre cre sill me does not } Goods: from ore fie PEN yards rol depend "stale cid yel ine mb TPTe anne LTD., vs THE DEPUTY COMMISSIONER OF COM IMBRC CIAL TAXES [ILR 2010 K #
16. The aforesaid the movement fof the goods from cytother or. Sf é "i ets ed e "is a resull of @ covenant san indidentaf the contract of sale, My ' state.sale, ro meatter in uphich Sicte the he goods frovyi ore cepolyper's ao sale ai i Phe-irnter sicte rroperte brs PH ihe et igs ue Sad al pad Saat roonid pe _ a bye a ny,
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na Peed?
Fi a lee a i PY n i i & i his asa L r LOlrre a * be jal aa :
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ocean, Said 2 oe od = 3 = C Soo om ie = . eas a a al vod " "efor -
ed _ : - ~ eet "a A ath ie _ a fe 2 a von c we vad = =. M - Q i rd a ° orp me ae: cS z = es Fi va 2 x : : some poe "hn? on ~
- ret vad ca "
ey wo vena c & 7 = bes < i elterod wood os os ao we - = mn "arent = 2 = hot . me = Se oe | wee a S ree a ~ z ne 2 2 pel Saha? = r " 5 & os on s S Toe : . Lv -
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7 al Sa oan a S = ue & : = eyed Sel ieyerst 4 ee © : e gs :
a wan a " = on oe oa ve ~ = : 5 : wee up _ = P f 2 Be ' ei ma us wel i " Fan a) tig ia lio" oh pe "
~ se oa Z heh or Me g t la wet re we 2 nae A ; c > re So pte? od fee ee - ved a eo ce S . i aad oe 7 OO y of = ~ a3 Oo haat "
- if sont sia aa "
ce ion ae oo, id aa ay ze wy Vel -
. os SS po " = ene 4 m= senna ae wt 5 cat at " = Sfmt Sy a" a = nd Niet iba ad ; ; fia! eit = ; po :
uf goineet ial Feel y : " vm Sd a o via?"
a Gaunt a) v2 nd pes a ia "o ; of feet good va wee rs, pint ar mm peng spooning an me eo "
seed wend nes i 'ain ee fe ae fromet :
Me cael az ie Course ol import oF 20 # f SOOUS SSE SEES NUECES rman a & AY west ft "eo :
an youd ft wetnoet gece ue be pai wy ged jd ne 'png af pan er
- AY = Sl Sent fans syne wed wt res Puta wn "na seu "
Nant sean ont papas Set porwr Saw! sya ound seo wes Sd on if ten, pond "ee seo fant oye head . pee ne Shee a gy ae Noe! ee os wre spe Sa ad pet aed fem Mag od we vee a fat Nod ul = ad Spe m Ay aa) ran bed pone Ni! Si ved io "f 'i pint te juve isi sae! ost, e yor Pevers Ne pes creed z oo ee Li sone snpone ae 24 = Ps ho ca :
aor ms a om nd at om 'et 0 Tet so = ba tae 4 see Soa St ae oy ¥ Sa cea ee aan se :
Es uifhor 3 ¢ CoP iderstar mans af vt % Soe! por too = ap: oy ae cent ea -
hove ran a3 a os Nou! A "ea + S Goose = ff Py es et nee we 5 a a 'po = 7 wast Catt come oe SS Tne Tt on saat a a ln ne Mt eet epee on win whe
- "eu "st = a Saat gi st = 3 . 2 Sed = 4 pees, GIG MLC am aie GAC SCS aP oe gowe - hs ee fom a3 om = te ae a foe é Lael ed we a ry ony my it pwc! ao , a3 'ioe aint ial ' i oe A Mt aha "at * WP send Me eet ere okt on ms ces fan "add Se! ite * ne Sus w hae vo a ;
ages ae o~, ean :
i te Act and the object with which it is enacted it cannot_be i that no tax Hablity under the Act is attracted to. goods which are imported. Ifthe goods are imported tito the State) as there is no movement of the goods from one State to anether, such.
sale did not satisly the requirement ae oes den consequently there is no Hability 2 De ay t ax une der Section 6. If after such firport, the goods are soid or purported to be sole in not attract sales tax a State in whic be it 'imports sd such goods either under 1 he local: la' or under. the Act. The imposition of sah ibite d by Artic le 286 read with Section payabie under the Act because the requirement of "Sec Hon ©. . complied with. But if after materials are imps ort d into the State and the said materials are ew product is manutactured and that eross the borders of the State in nen Section S is attracte pursiiance G1 ar _ Ii other words, if in pursuance of a contract of sale, after me ufac turing the goods. if occasions movement of such 'manufactured goods from one State to another State, Section 6 ie 3 and:
Se ist os 7 Na perk mistitution Bench of of COFFEE BOARD, BANGALORE vs. JOLVT-
COMMERCIAL TAX OFFICER, MADRAS. AND ANOTHER reported (1976) 3 SCR 147, . The phrase 'sale in the-
CONTE 2g in ouself three. esseritiet.
must actually be must Ded sr exported sale russi be a part and parcel ef ine @ etther the saie musi ¥ woods are already in the ta dd eereecerns Inere PLiNPig Cabres remfiers. or the sale Mish Occasion re wend oy BEL 20 Ca, OF tO oe is fo be regarded as his .weaig ine sale COUSES e couse of ihe export. The tie Fey thas cyl HES PPORTL Gli Ste cui) is Gevurich iy 'course a) 32 course of mecns 'progress or pracess of. -or™ ve Bey ne Pecan at Ee. oy ny oe ey gm eg oe dks sy iagene bg teh sherthy 'during'. The phrase exparcled wvtivr this meaning reads (in the progress or export' 'or during export'. Therefore the fidia to a foreign destination mi ish be 'estithlished ¥ 5 cid the sale must be a t uvich the sale is feid.
establis! hb export a persor ch Berson import "ore { 2 export is betiveert ther. of a-ihird party on fhe one ere dealing ind hard ard. the other breaks 2 PRY gor go pr 3; " rar Mere dre [1d sales ore oO orter, rom, fhe intermediary of STATE of BIMAR & ANOTHER vs. TATA rEOCEYaC : ENGINE EERING een wa?
"~The decided cases estanlish that scies considered as seles in course of export ori or ii the course of inierste comunerce under the following CIPCLUMSIONCES:~.
I} When goods which ate "in export or stream are soi:
country, cs the case recy. t jransported: to a Slaie othe incidence of the conlract Screquired fo be exportecl or or transported out of the Stale in which 2 place.
very Of GOods tt 'RKUGOPINATHAN NAIR AND ETC., es.
1 AIR 1997 SC 1925, the Joint Commerc Tax Officer ) ol the Act. The Apex Court O4t isaged in Section The third Constitution Bene . Judgment tis. found in the case of Coffee Board, Bangalore B doint Cormunercial Tax Officer, Me fadrés, _ £1969) & SCC 349:
(AIR 1971 SC 870). fn that.case the Coffee Board had sold calfee al ihe 7 export auctions. with a view ihat the coffee meu orted Waeugh these auction purch a ers 10 outside "coururies. It was the contention Lop the ¢ Col ffee Board that these sales were in: the' Cou se of a> De: rt af cal fee out of the territory of occasioned the export ai " coffee ford use 7. Indi aor. fo r sale in. Inclian markets. This ontei ror cunpassed in the writ petition under
-- "artiele 32 of the Constitution by the Coffee Boare "LES * ree 2 cted by the majority of the Constitution Beric he speaking through Midayatulah, Cl. I was rele, that the pelitioners cannot claim exemption _from tax. The phrase 'sale in the course of export' os ee sett ecg? ir] a alp Plypgs sea creep fips lee FPP ¢ fh pre prised eorprises in itself three essentials:(jinal there must be sale: fit) Giat goods must actually be exported 5 Be A Be and the principles laid down in the said case have we os mitegrally reserrdile fhe fransactior so PRG India can be ascribed fo such, a compesite"
Corrsis tine wued Gilegratec ransactiuts doue (7) freqied to he 2s cdirect privity of iparter and the rermecdtary through ed merely acts as rc The ctransacton. in substance must be such ne iiitimale local users appears or ES fernere mame lender he iocel lnporte Ser SUET OES.
Fa Spot Fret sn, ted ies pod Foot on Phe said letter clearly .demonstra OF rs elaborately im paragre isers as the other tvorkcs Givare "meces burt if con be said that the _corlract is predomdnanily for supply of train the servi GLoriature. The seruces SOEPUCeS fIFe Oe ee eS aa HS, e
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1B eck Post an 5, ) observed Pe CP Phe AS ISSUer pe ihe See iSCSI oc cen censure aes poke Ae a oo Noed pow amet pews "ene pee
2 a a ey i oa) ny i Sed ca eon :
on oy . res ong sued 2 elu' : oy iff pod ined - . ie a . Nl faa lot ft oe Sd By he Lae! poe a an a vie Sat faa a ei so : : Se pont ret ; oe oe Sie on i Ay ee! oi w mr fant of "a ia 4 } 4 po uv fi vets esa an on, to "
Sine! aed "tend oo td 'rent i" oe a : a ~ oat Saad . Ban 4 oy Sd "3 sain et fava py Sead cae ai von "we py ast Set : cal can See aso tat os fd at "poond ce ee etd . a ag ied fod oe Ge vn eg cad fa oe ee od nt ape oo "
f ed " ; my a4 rhe my on sent oad Joonbnd Kal nd to i * " se ps wed "see adlae Fi at r ong a ee y oon ye ¢ ti ° a deed * ¥ fev eal pane "0 x : of soe j a ne ms A ne a3 : ope » et "hal ea 'peel cS os ret posi ae mn ae a : cota tl ons 7 ek ant = : Se Foon) od Sal aL cet i