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TMI Blog1970 (4) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. AND HEGDE K.S. AND GROVER A.N. JJ. I.N. Shroff, Advocate, for the respondent. N.D. Karkhanis, Senior Advocate (Mrs. Anjali K. Varma, Advocate, and J.B. Dadachanji and Co., Advocates, with him), for the appellant. -------------------------------------------------- The judgment of the court was delivered by SHAH, J. -The appellants are a firm having their head office at Jabalpur in Madhya Pradesh and branch offices at Lucknow, Kanpur, Faizabad and Bombay. They are engaged in the business of manufacturing and selling bidis, and are registered as dealers under the C.P. and Berar Sales Tax Act, 1947. Between November, 1948, and October 12, 1949, the appellants despatched bidis of the value of Rs. 22,60,241-5-0 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, be omitted, and the words "liable for inclusion" be substituted by the words "liable to be included". We reframe the questions accordingly. The sales in respect of bidis which resulted in the turnover in question did not take place within the State of Madhya Pradesh. It is common ground that the bidis were appropriated to the contracts of sale outside the State of Madhya Pradesh. The transactions were for a period prior to the Constitution and the authority of a State to levy tax on transactions of sale was not subject to the limitation prescribed by article 286 of the Constitution. Section 2(g) of the C.P. and Berar Sales Tax Act, 1947, as then in operation provided: "'sale' with all its grammatical variations and cognate expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. The Sales Tax Officer held that the appellants had despatched bidis to their branch offices after receiving previous orders or contracts of sale which were "collected by" the appellants' "travelling salesmen, depot managers or other merchants or salesmen, in respect of goods manufactured and situated in the State of Madhya Pradesh and on that account Explanation (II) to section 2(g) of the Act was attracted and the transfers were sales within the State." In appeal the Deputy Commissioner of Sales Tax observed: "From the insistent demands of the branch managers, it is evident that the appellants' bidis were in great demand in those markets. The buyers were anxious to get stocks of appellants' brands of bidis and they were placing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake place outside the Province when the goods are appropriated towards the contract." Section 4 of the C.P. and Berar Sales Tax Act, 1947, is the charging section: it renders every dealer whose turnover exceeds the specified amount in respect of sales of goods in Madhya Pradesh liable to pay sales tax. Under the Act, tax is levied on sale. By the definition in section 2(g) "sale" is defined As transfer of property in goods for cash or deferred payment or for other valuable consideration. Under the provisions of the Sale of Goods Act, 1930, "sale" would ordinarily take place where goods are by mutual agreement appropriated towards the contract. Explanation (II) to section 2(g) however prescribes for the purposes of the C. P. and Bera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of this court in Commissioner of Sales Tax, Eastern Division, Nagpur v. Husenali Adamji and Co. [1959] Suppl. 2 S.C.R. 702; 10 S.T.C. 297 (S.C.)., does not make any departure from the rule enunciated in Tata Iron and Steel Co. Ltd.'s case [1958] S.C.R. 1355; 9 S.T.C. 267 (S.C.). In that case the court held that goods which were not in existence at the date of the contract of sale will not be deemed by virtue of the Second Explanation to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947, to have been sold within the Province, merely because the goods had subsequently come into existence. The case related to sales tax on sale of logs of wood. At the date of the agreement of sale, the logs were unascertained goods, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not deem it necessary to accede to that request. Under section 23, sub- section (5), of the C.P. and Berar Sales Tax Act, 1947, the Tribunal will decide the case according to the answer recorded by this court. We proceed to answer the two questions as follows: 1.. The turnover arising out of transactions aggregating to Rs. 21,47,228 is liable to sales tax in so far as it arises out of sales made in pursuance of contracts relating to goods which were at the date of the contract in existence within the Province. 2.. The turnover arising out of transactions amounting to Rs. 5,35,404-15-0 is liable to sales tax in so far as it arises out of sales made in pursuance of contracts relating to goods which were at the date of the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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