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TMI Blog1965 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... re directed against the judgment of the Allahabad High Court in a Sales Tax Reference made by the Judge (Revisions), Sales Tax, Uttar Pradesh, Lucknow, on being directed to do so by the High Court under section 11 of the Uttar Pradesh Sales Tax Act, 1948, hereinafter referred to as the Act. The question referred was as follows: "Whether in law the revising authority was right in holding that the sales in dispute were not for delivery outside Uttar Pradesh and that the applicant was not entitled to a rebate under section 5 of the Act." The question was referred in the following circumstances. The appellant, hereinafter referred to as the assessee-mills, carries on the business of manufacturing and selling sugar and is registered as a dealer under the provisions of the Act. During the previous year relevant to the assessment year 1948-49, the assessee-company had sold sugar to parties who carried on business outside Uttar Pradesh and also delivered the same outside Uttar Pradesh. It also sold sugar to parties who carried on business inside Uttar Pradesh but the sugar was despatched to stations outside Uttar Pradesh in compliance with the instructions issued by the buyers. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods and the party who takes the delivery must be one and the same. It is not disputed that the sales of sugar in respect of which the claim has been disallowed were in favour of one party and delivery was taken by another party outside U.P. The party after buying the sugar under a contract of sale had the goods despatched outside U.P. by the mills to another party outside U.P." He added later that "on a true construction of section 5 rebate will be permissible only if deli- very is taken outside U.P. by the same party which purchased the sugar from the mills". Then on the facts he held that the selling agents, Tandon Bros., who entered into a contract with the assessee- mills for sale of the goods were really the buyers and although the goods were despatched outside Uttar Pradesh in accordance with the despatch instructions of some contract arrived at between Tandon Bros., and the party to which the goods were ultimately delivered, the assessee-mills had not entered into the contract with the parties to which the goods were despatched outside Uttar Pradesh. He further repelled the argument that despatch instructions formed part of the contract. The assessee-mills then filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory godown, (b) when put on F.O.R. at factory station or (c) when tendered for carriage by rail at the said station, and in case of delay in accept (torn) by the Railway after such tender the said goods shall be deemed to be held by the seller on account of the buyer until they are put on rail. When the goods are received by Railway, all the terms and conditions of the Railway shall be deemed to be accepted by the buyer. Tender to the Railway for carriage shall be deemed to have been made when a (torn) carriage or a forwarding note has been given to the Station Master of the station. The seller shall not, (torn) circumstances whatsoever, be responsible for non-despatch, or refusal to despatch or delay in despatch or any (torn) mistake in despatch by the Railway. Where (after tender as aforesaid) any delay in despatch occurs, the buyer shall (torn) delivery of the goods without any claim against the seller on account of such delay or the consequence thereof (torn) delay in despatch is due to non-supply of wagons or due to booking restrictions, the seller, shall, if required by the (torn) obtain from the factory a letter stating the cause of the delay. Where owing to restrictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the seller the full price and all overdue or other charges and unless the complaint is made in writing to the seller within three days from the arrival of such consignment at destination, the date of such arrival being deemed to be the date of arrival entered in the books of the Railway Co., Steamer Co., Carrier or Port Authorities. The completion of Risk Note form A as required by the Railway authorities at certain seasons of the year shall not be construed as adverse remarks as to the condition of the goods or its packing. If any complaint as to quality, condition, quantity or weight is referred to arbitration and an allowance is awarded in respect thereof, the buyer shall retain the goods and such allowance shall be deducted from the price and be refunded by the seller." The High Court, in view of its finding that the delivery was contracted to be made ex-factory, the factory being within the State of Uttar Pradesh and the contract not containing any condition requiring the assessee to deliver the goods outside Uttar Pradesh, held that rebate was not admissible under section 5. The High Court said that its detailed reasons were contained in its judgment in Lord Krishna Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion which arises in these appeals is whether the word "delivery" in the expression "sales of such goods for delivery outside Uttar Pradesh" occurring in section 5 of the Act means actual delivery or constructive delivery. If it means constructive delivery then there is no doubt that on the facts as stated by the Judge (Revisions) the contract provided for constructive delivery inside Uttar Pradesh and the assessee-mills would not be entitled to rebate under section 5. The Madras High Court had occasion to consider a similar question in India Coffee and Tea Distributing Co. Ltd. v. The State of Madras [1959] 10 S.T.C. 359. It held that the word "delivery" in section 5 of the Madras General Sales Tax Act, 1939, which exempts from taxation sales of tea "if the sale is for delivery outside the State and delivery actually was made" did not include anything which the law deemed "delivery" but was restricted to physical delivery of the thing sold. In coming to this conclusion, Subrahmanyam, J., observed: "In deciding whether the word 'delivery' in section 5(v) includes delivery in law, we have to have regard to the objects of the Legislature in enacting section 5(v). The object obv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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