M/S. YASHA OVERSEAS versus COMMISSIONER OF SALES TAX & ORS.

Citation: [2008] 7 S.C.R. 919 · Decided: 06-05-2008 · Supreme Court of India · Bench: B.N. AGRAWAL · Disposal: Dismissed

Judgment (excerpt)

[2008] 7 S.C.R. 919 
M/S. YASHA OVERSEAS 
A 
v. 
COMMISSIONER OF SALES TAX & ORS. 
(Civil Appeal No. 2155/2000) 
MAY 6, 2008 
B 
.... 
[B.N. AGRAWAL, G.S. SINGHVI AND AFTAB ALAM, JJ.) 
Import-Export: 
Replenishment Licence - Sale of - Exigibility to sales c 
tax - Held: REP Licence is exigible to sales tax - Innate value 
of REP licence and its free transferability made it into a market 
commodity -
Constitution Bench decision in Sunrise 
Associates's case does not alter the position in regard to levy 
of tax on sale of REP licence - On the said issue \hkas Sales · 
Corporation's case is a good law 
D 
)' 
Duty Entitlement Passbook Scheme (Of.PB) - Sale of 
DEPB - Exigibility to sales tax - Held: DEPB has its own 
intrinsic value that makes it a market commodity- Thus, DEPB 
credit is 'goods' within the meaning of sales tax laws - It is 
E 
same as REP licence - Hence, sale of OEPB is exigible to 
tax. 
The batch of six appeals were referred to the three-
judge Bench. One of the appeals relates to the sale of 
Replenishment Licence and the other five relates to the 
F 
sale of Duty Entitlement Passbook Scheme. 
In H. Anraj v Govt. of Tamil Nadu (1986) 1 SCC 414, 
with regard to the amenability to sales tax of sale of lottery 
tickets, the two-judge Bench of this Court held th~t the 
sale of lottery tickets are not actionable claims and that in G 
every sale thereof a transfer of property in goods is 
involved and as such the sale of lottery tickets could be 
.... 
subjected to tax under T.N. General Sales Tax Act and 
Bengal Finance (Sales Tax) Act. Ten years later, in Vikas 
919 
H 
< 
920 
SUPREME COURT REPORTS 
[2008] 7 S.C.R 
,. 
A Sales Corporation v Commnr Of Commercial Taxes (1996) 
4 S CC 433 the three-judge Bench of this Court, affirming 
the decision in H. Anraj's case, held that the REP Licences/ 
Exims Scrips are not in the nature of actionable claims 
and thus, was exigible to sales tax. Thereafter, the 
B Constitution Bench decision in Sunrise Associates v Govt. 
of NCT of Delhi (2006) 5 SCC 603 held that lottery tickets 
were actionable claims and were therefore, excluded from 
the definition of 'goods under the Sales Tax Act, and hence 
the sale of lottery tickets was not subject to sale tax. 
c 
The question which arose for consideration in the 
batch of the ipstant six appeals was whether the three-
judge Bench decision of this Court in Vikas Sales 
Corporation stands impliedly overruled by the Constitution 
Bench decision in Sunrise Associates and the earlier 
D decision in H. Anraj v Govt. of Tamil Nadu (1986) 1 SCC 414 
holding 0therwise, did not lay down the correc~ law; and 
... 
that if the answer to this question is in the negative and 
Vikas case is still good law, would it also apply to sale of 
Duty Entitlement Passbook Scheme (DEPB). 
E 
Appellants contended that the decision in Vikas case 
while upholding the taxability of REP licences, referred 
approvingly to Anraj case which was expressly overruled 
,. 
by Sunrise case; that the reasons given in Vikas case for 
'"' 
F 
holding that REP licences were goods were also 
disapproved by Sunrise case, thus it must be held that 
the decision in Vikas case too stands impliedly overruled; 
that DEPB has materially different features and hence, the 
decision in Vikas case will have no application to the case 
of DEPB; that what was sought to be taxed was the 
G transfer of "Credit" in Duty Entitlement Passbook; that 
'credit' could never mean 'goods' under the sales tax laws; 
that being in the nature of debt, DEPB credit plainly fell 
within the first part of the definition of actionable claim; 
that even if the credit is seen not as a debt but as movable 
H property, sale of DEPB was a beneficial interest in the 
,. 
M/S. YASHA OVERSEAS v. COMMISSIONER OF 
SALES TAX & ORS. 
921 
movable property, thus, credit would still fall within the A 
second part of the definition of actionable claim; and that 
saleability of DEPB would not make any difference 
because many other actionable claims were equally 
saleable. 
Dismissing the appeals, the Court 
HELD: 1.1 The Constitution Bench decision in 
Sunrise case does not alter the position in regard to levy 
B 
of tax on sale of REP licence and on that issue the three-
Judge Bench decision in Vikas case continues to hold c 
the field. [Para 43] [953-C] 
1.2 DEPB has an intrinsic value that makes it a market 
commodity. Therefore, DEPB, like REP licence qualifies 
as 'goods' within the meaning of the Sal

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