1962 (1) TMI 50 - HC - VAT and Sales Tax

Summary

Issues:
- Appeal against the order of the Commissioner of Commercial Taxes revising that of the Deputy Commissioner of Commercial Taxes, Guntur.
- Disallowance of exemption claimed by the appellant for a turnover of Rs. 2,11,363-8-9.
- Commissioner of Commercial Taxes seeking to revise the order of the Deputy Commissioner under section 29(2) of the Andhra Pradesh General Sales Tax Act.
- Appellant's argument regarding the completion of sales outside the State and falling under the Explanation to Article 286(1)(a) of the Constitution.
- Interpretation of whether the delivery of goods outside the State was the direct result of the sale.
- Comparison with previous judgments to determine the inter-State character of the transactions.

Analysis:
The appellant, a rice working company, claimed exemption on a turnover of Rs. 2,11,363-8-9 representing sales of rice for consumption outside the State. The Commercial Tax Officer disallowed the exemption, but the Deputy Commissioner of Commercial Taxes ruled in favor of the appellant, directing the assessing authority to issue a revised demand notice. However, the Commissioner of Commercial Taxes sought to revise the Deputy Commissioner's order under section 29(2) of the Act, leading to the present appeal.

The appellant contended that the sales in question were completed outside the State and fell under the Explanation to Article 286(1)(a) of the Constitution, arguing that the delivery of goods outside the State was a direct result of the sale. The court analyzed the facts and transactions, emphasizing that the delivery was made to commission agents who acted for dealers outside the State, with the risk passing on to them immediately upon endorsement of railway receipts. The court concluded that the entire transaction, including delivery, was completed within the State, making it an inside sale without inter-State elements.

The court referred to previous judgments to support its decision, distinguishing the current case from others where the transactions were found to have an inter-State character. It highlighted the crucial factor of commission agents acting on behalf of principals outside the State, unlike cases where agents acted for the sellers. Consequently, the court dismissed the appeal, upholding the Commissioner's decision to revise the order of the Deputy Commissioner. The appellant was ordered to bear the costs, including advocate's fees.