1997 (4) TMI 473 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the sales of 22 motor cars were local sales within Andhra Pradesh or inter-State sales.
2. Whether the Tamil Nadu authorities have the jurisdiction to levy tax on these sales.
3. The relevance of the Andhra Pradesh Sales Tax Appellate Tribunal and High Court's decisions regarding the sales.

Detailed Analysis:

1. Whether the sales of 22 motor cars were local sales within Andhra Pradesh or inter-State sales:

The primary issue revolves around the turnover of Rs. 4,39,686 for the assessment year 1969-70, relating to the sale of 22 motor cars. The assessee contended that these sales were local sales within Andhra Pradesh, thus taxable there. However, the authorities, including the Sales Tax Appellate Tribunal, concluded that these were inter-State sales under section 3(a) of the Act, as the motor cars moved from Chennai in Tamil Nadu to Nellore and Chittoor in Andhra Pradesh pursuant to the sale contracts. The court upheld this view, emphasizing that for an inter-State sale under section 3(a), the sale must occasion the movement of goods from one State to another.

2. Whether the Tamil Nadu authorities have the jurisdiction to levy tax on these sales:

The assessee argued that the goods, manufactured in West Bengal, moved to the customers in Andhra Pradesh directly and thus should be taxed in West Bengal. However, the court found that the goods moved from Chennai to Andhra Pradesh, not directly from West Bengal. The court noted that the books of the assessee themselves included the disputed turnover as their own sales, indicating inter-State sales from Chennai to Andhra Pradesh. The court dismissed the argument that the Tamil Nadu authorities could not levy tax just because the goods passed through Chennai, highlighting that the sale contracts caused the movement of goods from Tamil Nadu to Andhra Pradesh.

3. The relevance of the Andhra Pradesh Sales Tax Appellate Tribunal and High Court's decisions regarding the sales:

The assessee pointed out that the Andhra Pradesh authorities, including the Sales Tax Appellate Tribunal and the High Court, had assessed the sales as local sales within Andhra Pradesh for multiple assessment years. However, the court noted that these orders covered four assessment years and a larger turnover, which did not directly correlate with the disputed turnover for the year 1969-70. Thus, the court did not place reliance on these orders. The court emphasized that the facts in the present case, including the incriminating records and the inspection reports, supported the conclusion that the sales were inter-State, with the goods moving from Chennai to Andhra Pradesh.

The court also referred to the precedent set in South India Automotive Corporation Private Limited v. State of Tamil Nadu [1980] 46 STC 1 (Mad.), where similar facts led to the conclusion that the sales were inter-State. Despite minor factual differences, the court found the principles applicable to the present case, reinforcing the view that the sales were inter-State and taxable in Tamil Nadu.

Conclusion:

The court dismissed the tax case revision, affirming that the sales were inter-State and taxable by the authorities in Tamil Nadu. The petition was dismissed with no costs.