IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.10.2010 CORAM THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA AND THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN W.P.No.36645 of 2002 M/s Sri Rama Vilas Services Limited 75-76, Anna Salai Chennai 600 002 rep.by its Executive Director (Operations) and Secretary .. Petitioner -vs- 1. The Tamilnadu Taxation Special Tribunal Chennai rep.by its Registrar, Chennai 2. The Tamil Nadu Sales Tax Appellate Tribunal Additional Bench, Chennai 3. The Additional Appellate Assistant Commissioner (CT-II), Chennai 4. The Commercial Tax Officer Triplicane Assessment Circle Chennai .. Respondents Petition under Article 226 of The Constitution of India, praying for the issue of a Writ of Certiorari, to call for the records on the file of the first respondent in TC(R) No.43/2002 for the assessment year 1987-88, dated 20.06.2002 and quash the impugned proceedings of the first respondent. For Petitioner : Mr.N.Chandrasekaran for M/s Subbaraya Aiyar Padmanabhan For Respondents : Mr.Haja Naziruddin Special Government Pleader (Taxes) ORDER (Order of the Court was delivered by F.M.IBRAHIM KALIFULLA, J.) The petitioner is the assessee. The challenge is to the order of the Special Tribunal dated 20.6.2002. By the impugned order, the Special Tribunal held that the exemption granted under Section 5(3) of the Central Sales Tax Act was for the penultimate sale and after https://hcservices.ecourts.gov.in/hcservices/ construction of the body by the assessee, the product has become a different one from the chassis which was entrusted with the assessee by M/s Ashok Leyland Limited and as such, after the conversion of the chassis as a bus, the petitioner was not entitled for the exemption granted under Section 5(3) of the Central Sales Tax Act. In fact, the Special Tribunal, while passing its orders, referred to a decision of the Karnataka High Court in Azad Coach Builders Private Limited v. State of Karnataka reported in 123 STC 473. That very decision of the Karnataka High Court was taken on appeal by the State of Karnataka in Civil Appeal Nos.5616-5617 of 2000 and Civil Appeal Nos.6594-6598 of 2000 (State of Karnataka v. Azad Coach Builders Private Limited and another). The Hon'ble Supreme Court in the judgment dated 14.9.2010, ultimately held as under, in paragraphs 26 & 27: "26. The facts of this case clearly reveal that the transaction between the assessee and the exporter is inextricably connected with the export of the goods to Sri Lanka. The communication between the foreign buyer and the exporter reveals that the foreign buyer wanted the bus bodies to be manufactured by the assessee under the specifications stipulated by the foreign buyer. The bus bodies constructed and manufactured by the assessee could not be of any use in the local market, but were specifically manufactured to suit the specifications and requirements of the foreign buyer. In the Purchase Order placed on the assessee by the exporter, it is specifically indicated that the bus bodies have to be manufactured in accordance with the specifications provided by the foreign buyer, failure to do so might result in cancellation of the export order. The assessee in this case has succeeded in showing that the sale of bus bodies have occasioned the export of goods. When the transaction between the assessee and the exporter and the transaction between the exporter and foreign buyer are inextricably connected with each other, in our view, the 'same goods' theory has no application. 27. We may also indicate that the burden is entirely on the assessee to establish the link in transactions relating to sale or purchase of goods and to establish that the penultimate sale is inextricably connected with the export of goods by the exporter to the foreign buyer, which in this case the assessee has succeeded in establishing." 2. Having regard to the said ratio laid down by the Hon'ble Supreme Court, it is incumbent upon the petitioner to establish that https://hcservices.ecourts.gov.in/hcservices/ the penultimate sale was inextricably connected with the export of goods by the exporter to the foreign buyer. In order to enable the petitioner to establish the said factor, while setting aside the order impugned in this writ petition, the matter is remitted back to the fourth respondent/assessing authority for fresh consideration. The petitioner is at liberty to place all materials before the fourth respondent to establish its claim that the penultimate sale to the exporter was inextricably connected with the export order of the exporter to the foreign buyer. In the event of the petitioner succeeding before the assessing authority, it will be open for the petitioner to seek for refund of whatever tax and penalty already paid. The writ petition stands allowed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar ss To 1. The Registrar, Tamilnadu Taxation Special Tribunal, Chennai 2. The Tamil Nadu Sales Tax Appellate Tribunal Additional Bench, Chennai 3. The Additional Appellate Assistant Commissioner (CT-II), Chennai 4. The Commercial Tax Officer Triplicane Assessment Circle, Chennai 1 cc To The Special Government Pleader (Taxes), SR.74161 W.P.No.36645 of 2002 PA(CO) sra 19/10/2010 https://hcservices.ecourts.gov.in/hcservices/