1977 (9) TMI 106 - HC - VAT and Sales Tax

Summary

Issues:
1. Imposition of tax on disputed turnover under the Central Sales Tax Act, 1956 for the assessment year 1964-65.
2. Determination of whether there were two sales in the case and the nature of these sales.
3. Analysis of whether there were any inter-State sales exigible to tax under the Central Sales Tax Act, 1956.

Analysis:
The High Court of Madras heard an appeal against the Board of Revenue's decision to impose tax on a disputed turnover under the Central Sales Tax Act, 1956 for the assessment year 1964-65. The Board of Revenue based its decision on the principles established by the Supreme Court in Mod. Serajuddin v. State of Orissa, which highlighted the distinction between local sales and sales in the course of export. The Board concluded that the sales by the assessee to the Calcutta buyers were local sales exigible to tax. The Court noted that there were two sales in the case, one between the assessee and the Calcutta buyer, and the other between the Calcutta buyer and the foreign buyer. The Court emphasized the need to determine the nature of these sales, especially in the context of inter-State sales under the Central Sales Tax Act, which had not been fully considered by the authorities.

The Court examined the movement of goods in the transactions, emphasizing that for a sale to be considered an inter-State sale, there must be movement of goods from one state to another. In this case, goods were sent to both Cochin and Madras ports, with goods from Coimbatore entering Kerala and being shipped from Cochin. The Court clarified that only the turnover relating to goods transported from Coimbatore to Cochin was taxable under the Central Sales Tax Act, as this constituted an inter-State sale. On the other hand, goods moved within Tamil Nadu from Coimbatore to Madras did not qualify as inter-State sales and were not taxable under the Act. The Court highlighted the importance of the movement of goods across state borders in determining the tax liability under the Central Sales Tax Act.

In conclusion, the Court partially allowed the appeal, holding that only the turnover relating to goods transported from Coimbatore to Cochin was taxable under the Central Sales Tax Act. The Court directed each party to bear their respective costs, considering the partial success and failure of the appeal. The judgment provided a detailed analysis of the nature of the sales involved, the inter-State movement of goods, and the applicability of the Central Sales Tax Act to the transactions in question.