1997 (8) TMI 485 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of value of goods transferred as inter-State sales for the assessment year 1980-81.
2. Interpretation of movement of goods occasioned by the indent received by the head office.
3. Distinction between standard and non-standard goods in relation to inter-State sales.
4. Determining the liability for Central sales tax based on the link between movement and sale.

Analysis:
1. The case involved the assessment of a sum of Rs. 1,92,631.23 as the value of goods transferred by the assessee to its branch office in Bangalore for the assessment year 1980-81, treated as inter-State sales. The Tribunal upheld the assessment based on similarities to a Supreme Court case, Sahney Steel and Press Works Ltd. v. Commercial Tax Officer [1985] 60 STC 301.

2. The Revenue argued that goods transferred based on indents received at the head office should be considered as movement occasioned by the indent. However, the goods were not specially manufactured for the dealers, and the branch offices had autonomy in sales to customers of their choice. The property in the goods did not pass to the buyer until appropriation to the contract, indicating a lack of inextricable link between movement and sale.

3. The distinction between standard and non-standard goods was crucial in determining inter-State sales liability. The judgment referenced Sahney Steel case, emphasizing that non-standard goods manufactured to buyer specifications constituted inter-State sales. In this case, the goods were standard, not earmarked for specific buyers, and the branch offices had discretion in sales, leading to a different outcome from Sahney Steel.

4. The Court found that the facts of the present case were distinguishable from Sahney Steel, as there was no direct link between the movement of goods and the ultimate sale to the buyer. The Tribunal's decision to hold the assessee liable for Central sales tax solely based on the receipt of indents at the head office was deemed erroneous. The revision petition was allowed, setting aside the Tribunal's order, with each party bearing their respective costs.