47. an importer at Delhi imported the goods from "Y" of London and after obtaining clearance from customs: he sold the goods to buyer in Indian and claimed exemption, but the sales tax officer rejecting the claim of "X' levied tax under the Central Sales Tax treating.it as not a sale in the course of import. Whether the assessing officer is correct? Defend your client.

An importer ‘X’, located in Delhi, imported goods from ‘Y’, a supplier based in London.
After obtaining customs clearance, the goods were sold to a buyer in India.
The importer claimed that the sale was in the course of import and hence exempt under Section 5(2) of the Central Sales Tax Act, 1956.
However, the Sales Tax Officer rejected the exemption, holding that the sale occurred after the import was completed and therefore levied CST.
The issue is whether the sale qualifies as a sale in the course of import, or whether it is liable to Central Sales Tax.

Whether the sale of goods by the importer after clearance from customs qualifies as a sale in the course of import under Section 5(2) of the CST Act?
Can the importer claim exemption from CST even though the sale was made after the goods had crossed Indian customs frontier?
Is the Assessing Officer’s action legally valid, or is the importer entitled to exemption?

Section 5(1): A sale or purchase of goods is deemed to be in the course of import if:
- The sale occasions the import of the goods into the territory of India.
Section 5(2): A sale is also deemed to be in the course of import if:
- It is a sale effected by transfer of documents of title to the goods before the goods cross the customs frontier of India.

K. G. Khosla & Co. v. Dy. Commissioner of Commercial Taxes (1966) 17 STC 473 (SC): A sale which is integrally connected with import and effects import can be considered a sale in the course of import.
Binani Bros. Pvt. Ltd. v. Union of India (1974) 33 STC 254 (SC): If the title to the goods passes after customs clearance, then the sale is not in the course of import.
State of Karnataka v. Azad Coach Pvt. Ltd. (2010) 36 VST 1 (SC): There must be a privity of contract between the foreign seller and the Indian buyer before import begins to claim exemption.

Since the sale was made after customs clearance, and not by way of transfer of title before import ends, the sale does not fall under Section 5(2).
Therefore, the officer holds that it is a domestic sale, and CST is applicable.

If the importer had entered into a contract of sale with the Indian buyer before the goods were imported, and the import was carried out specifically to fulfill that contract, then Section 5(2) exemption could be invoked.
However, if the sale was made after clearance, and no pre-existing contract or transfer of document of title during import exists, the transaction becomes intra-India sale post-import.

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