The appellant [civil appeal no 7863 of 2009] after importing foreign made cigarettes stored the same in the custom bounded warehouse within the land mass of the State of WB and then sold some articles to the Master of foreign going ship without payment of Custom Duty but the assessing officer rejected the claim for exemption from payment of sales tax as according to authority it wasn’t a sale in the course of import and the goods sold were taxable. In revision before the West Bengal Taxation Tribunal same judgement was given.Feeling aggrieved by which W.P.T.T. No. 5/2007 was filled in the HC, which was rejected upholding the view taken by the tribunal as just and proper. In Civil appeal no 7864 of 2009, where the facts are almost same, the Tribunal and the HC had given a similar judgement. Aggrieved by which appeal was filed in SC and both the cases were heard together.

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The principal question involved in these appeals is whether the subject sales to foreign bound ships as “Ship stores” can be recorded as sale within the territory of the State and Amendable to sale tax under the West Bengal Sales Tax Act, 1954 or West Bengal Sales Tax Act, 1994.

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A constitution Bench of the SC in Md. Serajuddin & Ors. V. State of Orissa has held that expression “in the course” implies not only on a period of time during which the movement is in progress but postulates a connected relation.In the present case, goods are going to be consumed on the board of the foreign going ship and the same would be consumed before reaching the destination and hence doesn’t fall under the definition of ‘export’. Section 5(3) of the CST Act, 1976 does not affect these cases because the bonded warehouse where the stated sales occurred is within the land mass of the State of WB and not shown to be within the customs station area.

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It was held that the stated sales occurred within the land mass/ territory of the State of WB and therefore it was a sale amenable to levy of sales tax under the 1954 Act and the 1994 Act, as the case may be, read with section 4 of the CST Act. Hence, the appeals were dismissed and all other pending interlocutory applications stand to be disposed of.

The another case was taken together Parsan Brothers & Anr v. Assistant Commissioner of Commercial Taxes & Ors. [Civil Appeal No. 7864 of 2009]

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