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TMI Blog1969 (2) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same to various buyers in India. For the calendar year 1st January, 1958, to 31st December, 1958, the appellant was assessed to sales tax under the C.P. and Berar Sales Tax Act, 1947 (since repealed by the Madhya Pradesh General Sales Tax Act, 1958). During the said period the appellant had sold manganese ore to eight different parties outside the State of Madhya Pradesh under written contracts. It was contended on behalf of the appellant before the sales tax authorities that these contracts occasioned movement of the sold goods from the State of Madhya Pradesh to the State of Maharashtra so that all the sales were exempt from tax under the C.P. and Berar Sales Tax Act, 1947, and also under the Madhya Pradesh General Sales Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded on 11th September, 1956, by the Constitution (Sixth Amendment) Act, 1956. By the amendment, the explanation to the first clause to article 286 was omitted and for clauses (2) and (3) the following clauses were inserted: "(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3 covers sales, other than those included in clause (b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State." This observation of Shah, J., was cited with approval by this court in Cement Marketing Co. v. State of Mysore [1963] 14 S.T.C. 175., and again in State Trading Corporation v. State of Mysore [1963] 14 S.T.C. 188. In the latter case, Sarkar, J., observed thus: "The question then is, did the sales occasion the movement of cement from another State into Mysore within the meaning of the definition. In Tata Iron & Steel Co. Ltd. v. S.R. Sarkar [1960] 11 S.T.C. 655., it was held that a sale occasions the movement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay and under the rest f.o.r. Katanjhari, which is in the State of Madhya Pradesh. There is no dispute that the ore was loaded by the appellant into wagons at Katanjhari indented by the buying firm. There is also no dispute that the wagons went out of the State to Nagpur and Bombay respectively, the buyer acting as consignor and consignee. The only question to be examined is whether the movement of goods from the State of Madhya Pradesh into the State of Maharashtra was occasioned by the terms of the respective contracts. There was an important stipulation in each of the contracts that the first weight at Gondia weigh-bridge shall be the weight for the purpose of the contract. This stipulation in the contract necessitated the movement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that the decision in Commissioner of Sales Tax, Madhya Pradesh v. Nathani Brothers [1968] 21 S.T.C. 465., was not correct.
For these reasons, we hold that in the facts and circumstances of this case the sales of manganese ore by the appellant were in the course of inter-State trade and, therefore, exempted from tax under the C. P. and Berar Sales Tax Act, 1947, and the question of law referred to the High Court must be answered in favour of the appellant and against the Commissioner of Sales Tax, Madhya Pradesh. Accordingly, we set aside the judgment of the Madhya Pradesh High Court dated 6th December, 1967, in Misc. Civil Case No. 168 of 1964 and allow this appeal with costs.
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