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TMI Blog1975 (8) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively. The appellant claimed sales return to the extent of Rs. 79,034.28. The assessing authority found that the claim related to unfructified sales which could not be properly called sales return. As unfructified sales, it could be excluded only from the turnover relating to the year of such sales . If it were sales return, in view of the authorities, it could be allowed even in a later year, as longer as the claim is made within the time. Though the claims were apparently within time for the purpose of sales return, the assessing authority took the view that these were unfructified sales, because in these cases, the purchases failed to take delivery of the goods and hence he allowed only deduction for sales effected during the year und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities, the High Court itself did not approve the method of disallowing such claims in both the year. It was further submitted that there was no material for holding that there was no sales return merely because the goods were not physically delivered to the purchases. He argued that neither s. 2(r) r/w s. 13(5) of the Tamil Nadu General Sales Tax Act 1959 or Rule 5-A(b) of the Tamil Nadu General Sales Tax Rules 1959 justified the disallowance merely on the ground that the sales were made in one year and the return in another year. The learned State Representative, on the other hand, relied upon the views, of the lower authorities and claimed that it was not a case of sales return but of unfructified sales. Such unfructified sales coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the Bank. For some reason or the other, the purchasers were not able to honour the documents. When the banks returned the same, the appellant had the option either to treat the goods as those of the purchases, realise them and credit the sale proceeds to the account of purchases, and sue for the difference and damage. The other alternative was to recall the goods, credit the purchasers with invoice amounts while debiting them with expenses. The appellant had chosen to adopt the latter course as a matter of business expediency. If the first course had been adopted, the authorities could not have possibly stated that it was unfructified sales. The fact that a second course has been adopted, does not change the nature of the transactions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted sales, the appellant would be violating the company law regulations in treating them as completed sales in its books. In fact, the appellant has returned them as taxable sales in its monthly returns and paid tax thereon. The assessment has also been made on such turnover. In fact, if the authorities were to take such view, they would not have been justified in including the sales of goods at the end of the year to the extent there were not cleared by the customers before 31st March, 1973 either due to transit or because of time taken before honouring the documents from the Bank. Actually, they have not eliminated such sales and have been taking them as sales and allowing them as sales return, if undelivered, later even in the past. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sale relates or it may mean the passing of the property in the goods from the seller to the buyer by such means as delivery to the carrier etc. The scheme of the Act shows that the element of passing of property is not of relevance in determining the situs of the sale. The questions of appropriation of goods has to be decided therefore, irrespective of the passing of property. In other words, the appropriation referred to in s. 4(2)(b) connotes the setting apart of goods as specific goods to be delivered under the contract of sale and not an appropriation linked with passing of property. (The Indian Wood Products Company Ltd. vs. The Sales Tax Officer, Ward No. 13, New Delhi.") This view had the approval of Madras High Court also in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the sale had not taken place at all, the Tribunal was in error in deleting it from the turnover of a subsequent year and to in the year in which the relevative turnover was originally considered. The High Court therefore corrected this order. But the High Court did not obviously approve the conduct of the authorities in disallowing such claims in both the years. In fact, the High Court made it clear that such claim should be considered under s. 55 of the act in the earlier year. We are told that the authorities have not allowed the deduction in the earlier year till date in this case. We have found that it is not a case of unfructified sales but completed sales, where credit note or sales return advice have been subsequently issued bec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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