NATIONAL ALUMINIUM CO. LTD. versus THE STATE OF A.P. & ORS.

Citation: [2008] 3 S.C.R. 55 · Decided: 19-02-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Case Partly allowed

Judgment (excerpt)

[2008] 3 S.C.R. 55 
.;-
NATIONAL ALUMINIUM CO. LTD. 
A 
V. 
THE STATE OF A.P. & ORS. 
,. 
(Civil Appeal No.1416 of 2008) 
FEBRUARY 19, 2008 
B 
(DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.) 
Central Sales Tax Act, 1956; Section 4(2)/Andhra 
Pradesh General Sales Tax Act, 1956: 
Levy of sales Tax on sale of goods - A Government c 
company exporting aluminium/goods through a Port in Andhra 
Pradesh earning duty entitlement under Duty Entitlement Pass 
Books (DEPBJ Scheme - Auction of entitlement under the 
Scheme from its corporate office in Orissa - Selling of 
entitlement to highest bidder treating the sale as inter-State D 
sale paying Central Sales Tax to the State of Orissa - Levy of 
sales tax by assessing authorities in State of Andhra Pradesh 
- Correctness of - Held: Issue before the Sales Tax Tribunal 
was limited to determination of the question as to whether any 
sale took place within the State of Andhra Pradesh - There E 
was no material placed before the Tribunal to come to a definite 
finding that the sale could be treated as intra-State Sale within 
the State of Orissa -
Such conclusion by the Tribunal 
~ 
unsustainable though Tribunal was right in holding that there 
was no intra-State sale which took place within the State of F 
' 
Andhra Pradesh. 
Appellant is a Government Company having its 
corporate office at Bhubaneshwar in Orissa and 
mercantile office at Visakapatnam, Andhra Pradesh. 
Appellant alleged that there was no sale or .purchase of G 
goods carried out by them· in the State of Andhra Pradesh; 
that they would earn Credit under Duty Entitlement Pass 
Book (DEPB) licence as contemplated under Exim Policy 
as a result of their export from its mercantile office at 
55 
H 
56 
SUPREME COURT REPORTS 
[2008] 3 S.C.R. 
A Visakhapatnam Port; that since the exports were effected 
at Visakhapatnam Port, an account of DEPB licenses was 
maintained by the customs authority at Visakhapatnam. 
Against such exports, the petitioner got some import duty 
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entitlement under the DEPB scheme. They held open 
B auctions of these entitlements from the Head Quarters at 
Bhubaneswar. In those auctions the bidders from other 
States emerged as the highest bidders. Accordingly, the 
appellant sold the import duty entitlement under the DEPB 
Licenses to the highest bidders and treating the same as 
c inter-state sale, collected and paid CST to the Government 
of the exporting State i.e., Orissa. The Assessing 
Authorities in Andhra Pradesh issued show cause notice 
proposing to levy tax under the Andhra Pradesh General 
Sales Tax Act, 1956 on the transactions relating to transfer 
0 of the DEPB Licenses on the ground that such licenses 
were registered with Visakhapatnam Port through which 
the export took place. By the impugned common 
judgment, the Tribunal decided the matter in favour of the 
appellant holding that the sale did not take place within 
the State of Andhra Pradesh. But held that it took place 
E inside the State of Orissa as per Section 4(2) of the Central 
Sales Tax Act, 1956. Hence the present appeals. 
Appellant contended that the Tribunal could not have 
recorded a finding that there was an intra-state sale within 
F the State of Orissa; and that there was no sale involved 
to attract levy of any sale tax. But without any material it 
held that there was an intra state sale within the State of 
Orissa, the Tribunal could not have come to such a 
conclusion. 
G 
Respondent-State of Andhra Pradesh submitted that 
H 
the Tribunal has decided the basic issues that there was 
no sale within the State of Andhra Pradesh, but on the 
facts came to a tentative conclusion about this intra-state 
sale in the State of Orissa. 
... 
NATIONAL ALUMINIUM CO. LTD. v. THE STATE OF 
57 
A.P. & ORS. 
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Partly allowing the appeals, the Court 
A 
HELD: 1.1 It is clear that the scope of consideration 
before the Tribunal was very limited as to whether any 
1 
sale took place within the State of Andhra Pradesh. 
' 
Having decided that issue, Tribunal was not required to B 
.l 
go into any other question particularly when the relevant 
factors were not before it. (Para - 7) [60-G; 61-AJ 
1.2 There was no material whatsoever to show that 
the sales could be treated as intra state sale within the 
State of Orissa. The assessing authorities proceeded to c 
levy tax on erroneous premises. In the ultimate analysis 
the Tribunal held that the sales did not take place within 
the State of Andhra Pradesh. The conclusions to

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