BINANI BROS. (P) LTD. versus UNION OF INDIA & ORS.

BINANI BROS. (P) LTD. versus UNION OF INDIA & ORS.

The sales by the petitioner to DGS&D did not occasion the movement of goods in the course of import; it was the petitioner’s purchases from foreign sellers that occasioned import. There was no privity of contract between DGS&D and foreign sellers, and the sales to DGS&D were distinct from the import transactions. Therefore, the deduction and demand for refund of sales tax by respondents is not justified. Annexure P-1 order is quashed.

Parties
Petitioner: Binani Bros. (P) Ltd.; Respondents: Union of India & Ors.; Respondents: Respondents Nos. 5-t>
Jurisdiction
India
Judgment Date
11 December 1973
Procedural Posture
Writ Petition Under Article 32 of the Constitution of India / Final Judgment
Outcome
Writ petitions allowed. Annexure P-1 order quashed as regards the petitioner.
Legal Topics
Sales Tax Exemption, Sale or Purchase in the Course of Imports, Central Sales Tax Act, Interpretation of Article 286 of the Constitution
Constitutional Law Tax Law Sales Tax Exemption Sale or Purchase in the Course of Imports Central Sales Tax Act Interpretation of Article 286 of the Constitution

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Parties

Binani Bros. (P) Ltd.

Petitioner

Union of India & Ors.

Respondents

Respondents Nos. 5-t>

Respondents

Procedural Posture

Writ Petition Under Article 32 of the Constitution of India / Final Judgment

Legal Issues

  1. 1 Whether sales by petitioner to DGS&D occasioned the movement of goods in the course of import for the purpose of exemption under Article 286 and section 5(2) of the Central Sales Tax Act
  2. 2 Whether deduction and recovery of sales tax by respondents was justified

Ratio Decidendi

The sales by the petitioner to DGS&D did not occasion the movement of goods in the course of import; it was the petitioner’s purchases from foreign sellers that occasioned import. There was no privity of contract between DGS&D and foreign sellers, and the sales to DGS&D were distinct from the import transactions. Therefore, the deduction and demand for refund of sales tax by respondents is not justified. Annexure P-1 order is quashed.

Court Disposition

Writ petitions allowed. Annexure P-1 order quashed as regards the petitioner.

Orders

  • Annexure P-1 order quashed as regards the petitioners.
  • Respondents not entitled to deduct or recover sales tax from petitioner as claimed.