STC No.10 of 1993 #1# IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH STC No.10 of 1993 Date of Order: 21.10.2009 Hindustan Everest Tools Limited, Dohil Chambers ...Petitioner Versus State of Haryana and others ....Respondents CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JASWANT SINGH Present: Mr. Neeraj Khanna, Advocate for the petitioner. Mr. Sunil Nehra, AAG, Haryana for the respondents. 1. To be referred to the Reporter or not? 2. Whether the judgment should be reported in the Digest? M.M. KUMAR,J This is a petition filed under Section 42(2) of the Haryana General Sales Tax Act, 1973 (for brevity “the Act”) for issuance of directions to the Haryana Sales Tax Tribunal (for brevity “the Tribunal”) to make a reference to this Court in respect of questions of law raised by the petitioner for the assessment years 1973-74. The petitioners have claimed various questions of law as given in para 12 of the petition would arise for determination of this court, which are as follows: “1) Whether in the facts and circumstances of the case the transaction of the applicant are sales made in the course of export within the meaning of Section 5(1) or in the course of interstate STC No.10 of 1993 #2# sales within the meaning of Section 3(a) of the Central Sales Tax Act? 3) Whether, in case the answer to question No.(2) above is that the sales are not covered by Section 5(1) of the Central Sales Tax Act, in view of the language used in Rule 29(v) of the Punjab General Sales Tax Rules, 1949, which were applicable to the State of Haryana during the year 1973-74, the applicant is entitled to claim the benefit of exemption from tax? 4) Whether Rule 29(v) is in any way ultra vires to Article 286 of the Constitution or the judgment of Hon'ble Supreme Court in Mohammad Serajuddin's case?” The aforesaid prayer made by the petitioner to the Tribunal for referring the questions of law was declined vide order dated 29.5.1992 in STM No.27 of 1990-91. There are categorical finding recorded that the petitioner had no privity of contract with the foreign buyers, who imported the goods nor there is any corresponding contractual obligation undertaken by the petitioner to export the goods outside the territory of India. On the basis of the aforesaid finding of fact, the Tribunal had declined the application filed by the petitioner under Section 42(1) of the Act in which prayer was made for making reference of the aforesaid questions of law to this Court. Tribunal has placed reliance on the view taken by a Constitutional Bench of Hon'ble the Supreme Court in the well-known judgment of Mohd. Serajuddin and Others v. The State of Orissa (1975) 2 SCC 47. It is appropriate to mention that while deciding the appeal filed by the petitioner vide order dated 5.4.1990, the Tribunal also recorded the following findings, which are reproduced in extenso: “I have given thought to the pleadings of the parties and seen the facts on record. From the perusal of the facts of the case there cannot be any doubt that there was no privity of contract between STC No.10 of 1993 #3# the appellant and the foreign buyer. Contract was entered into by the foreign buyer and the export house and not between the foreign buyer and the appellant but the fact that the appellant remained responsible for the qualities and the standards of the goods and arranged loading and payment of charges would not add to the fact that there was not (sic, no?) direct contract with the foreign buyer entered into with the appellant. It would not be fair that the indirect export should be made eligible for the benefits and concessions as would be accruable to the direct export. I also agree with the views of the District Attorney with regard to applicability of the 29 rule of the Punjab General Sales Tax Rules, 1949 and find no reasons to take a different view than that has already been held by the Tribunal in Steel Krafts case. As a result, I see no reasons to interfere with the orders of the lowers authorities and find that the lower authorities have acted correctly in disallowing these transactions as export sales and treating them as inter-State Sales. I, therefore, see no force in the appeal which is hereby dismissed.” A perusal of the aforesaid finding would show that the matter pertains to the assessment years 1973-74 and the law applicable would be as it was existing at that time. Accordingly, Rule 29 of the Punjab General Sales Tax Rules, 1949 (as applicable to Haryana) (for brevity “1949 Rules”) was applicable. Rule 29(v) of 1949 Rules as it existed and applicable to the facts of the present case reads thus: “A dealer is entitled to deduct from his gross turnover “the sale of goods (including minerals & Minerals ores) proved to be exported out of the territory of India whether by one transaction or by a series of transactions.” The Rule read with provisions of Section 5(1) of the CST Act did not confer benefit of a transaction of sale made during the course of export on the penultimate seller but restricted the benefit only to the actual STC No.10 of 1993 #4# exporter. The controversy has been raised and settled by a Constitution Bench of Hon'ble the Supreme Court in Mohd. Serajuddin and Others' case (supra) by interpreting Section 5(1) of the Central Sales Tax Act, 1956 at the stage when the amendment by way of addition of Section 5(3) of the Act was not yet made. The aforesaid amendment was made w.e.f 1.2.1976 whereas the transaction in the instant case is of earlier period of 1973-74. Although the language of Rule 29(v) of 1949 Rules and Section 5(1) of the CST Act is slightly different but in content and substance, it is similar. In other words, it does not include the penultimate transaction of sale in the course of export, which has been included for the benefit by the amendment carried in 1976. The aforesaid position has also not been seriously disputed by the counsel for the petitioner. Therefore, we are of the view that substantive questions, which are sought to be raised by the petitioner, have to be answered in favour of the revenue and against the assessee. In view of the above, we do not find any ground to direct the Tribunal to make any reference to the Courts in respect of substantive questions of law as the matter stands already settled. Disposed of in the above terms. ( M.M. KUMAR ) JUDGE October 21, 2009 ( JASWANT SINGH ) manoj JUDGE