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1975 (12) TMI 136 - SC - VAT and Sales TaxWhether, in the facts and circumstances of this case, the transaction constituted sale in the course of inter-State trade? Held that - Appeal dismissed. Even though the sale took place at Calcutta, as rightly found by the High Court, since the movement of goods preceded the sale in pursuance of the contract of sale which contained a clear stipulation that the goods were to move from Orissa to Calcutta in West Bengal, the movement of goods was occasioned by the sale itself which took place in Calcutta. In these circumstances, therefore, the High Court was legally justified in holding that in all these appeals the cases were clearly covered by the provisions of section 3(a) of the Central Sales Tax Act.
Issues Involved:
1. Whether the title to the goods passed in Orissa or in West Bengal. 2. Whether the transaction constituted a sale in the course of inter-State trade. Detailed Analysis: Issue 1: Whether the title to the goods passed in Orissa or in West Bengal. The court examined the facts and circumstances to determine where the title to the goods passed. It was established that the appellant firms had an agreement to sell raw jute of certain specifications to buyers in Calcutta. The modus operandi involved booking the goods from railway stations in Orissa to the buyers' mills siding in Calcutta. The High Court found that although the title in the goods passed in West Bengal and the sale took place there, the sale occasioned the movement of the goods from Orissa to West Bengal, making it an inter-State sale under Section 3(a) of the Central Sales Tax Act. Issue 2: Whether the transaction constituted a sale in the course of inter-State trade. The court analyzed the scope and ambit of the Central Sales Tax Act, particularly Section 3(a), which defines an inter-State sale. The court noted that for a sale to be considered inter-State, it must involve: 1. A sale of goods. 2. The movement of those goods from one State to another under the contract of sale. The court concluded that the agreement to sell, which included a stipulation for the movement of goods from Orissa to West Bengal, satisfied these conditions. The movement of goods was in pursuance of the contract of sale, and the sale was completed when the goods were accepted in West Bengal. Therefore, the sale was an inter-State sale under Section 3(a) of the Central Sales Tax Act. Conclusion: The court held that the sales in question were inter-State sales as defined under Section 3(a) of the Central Sales Tax Act. The movement of goods from Orissa to West Bengal was occasioned by the contract of sale, and the title passed in West Bengal. Consequently, the State of Orissa was competent to levy the sales tax under Section 9 of the Central Sales Tax Act. The appeals were dismissed without any order as to costs.
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