9911796707
TMI Blog1980 (9) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... Biswaroop Gupta, Bhaskar Gupta, Surhid Roy Chowdhury and D.N. Gupta, Advocates, with him), for respondent No.5. Miss A. Subhashini, Advocate, for the respondent No.1 Lal Narain Sinha, Attorney-General (U.P. Singh, Advocate, with him), for the respondent No. 4 F.S. Nariman and Anil B. Dewan, Senior Advocatesd (B.D. Barucha, Ravinder Narain and Talat Ansari, Advocates, with them), for the petitioner. -------------------------------------------------- The judgment of the Court was delivered by GUPTA, J.- In this petition under article 32 of the Constitution of India a dealer seeks relief from the same sales being assessed to sales tax both under the Central Sales Tax Act and the U.P. Sales Tax Act. The first petitioner, Indian Oil Corporation Limited, IOC for short, are a Government company incorporated under the Companies Act, 1956, engaged inter alia in the manufacture and marketing of petroleum products. The second petitioner is the managing director and a shareholder of IOC. Union of India has been impleaded as the first respondent in the petition. The 2nd respondent is the Assistant Superintendent of Commercial Taxes, Central Circle, Bihar. The 3rd a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any year for reasons other than force majeure at their Barauni refinery and/or the transportation system from Barauni to their Panki installation, the buyer shall be entitled to purchase the quantity not delivered in that year from other sources. 4.. The supply of naphtha to the buyer shall be made from the seller's refinery at Barauni. 5.. The price of naphtha shall be exclusive of transfer charges, excise duty and all other tax levies which shall be recovered by the seller from the buyer at actual rates prevailing and levied by concerned agencies from time to time. 7.. (i) Naphtha shall be supplied through a pipeline at the fence of the buyer's fertilizer factory and the pipeline between the buyer's and the seller's fences shall be constructed by the buyer at their expense. (ii) The cost of transferring naphtha by the pipeline from the point of its manufacture to the fence of the buyer's fertilizer factory shall be borne by the buyer. 8.. The seller shall provide at their cost storage facilities at the seller's Panki/Kanpur installation of a capacity equivalent to not less than 30 days' requirement of the buyer. 10.. (iii) Three samples of naphtha for testing will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority under the U.P. Sales Tax Act treated the sales of naphtha to the 5th respondent as inter-State sales presumably in view of the aforesaid judgment of the Allahabad High Court. This assessment order was challenged by the Commissioner of Sales Tax, U.P., in revision before the appropriate authority. For the same assessment year the Bihar authority assessed the sales on the basis they were inter-State sales. For the next assessment year 1972-73 the U.P. authority again treated the sales as inter-State sales and again the order was challenged in revision by the Commissioner of Sales Tax, U.P. The Bihar authority also treated the sales for that year as inter-State sales. Thereafter for the assessment years 1973-74 and 1974-75 somewhat surprisingly the U.P. assessing authority went back on the view taken in the immediately preceding two years and again treated the sales as local sales and the 5th respondent preferred appeals from these two orders of assessment. In this confused situation IOC filed the instant writ petition in this Court on May 1, 1979. Meanwhile the appellate authority under the U.P. Sales Tax Act dealing with the appeal preferred by IOC against the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of this Court that a sale shall be an inter-State sale under section 3(a) if there is a contract of sale preceding the movement of goods from one State to another and the movement is the result of a covenant in the contract of sale or is an incident of that contract; in order that a sale may be regarded as an inter-State sale it is immaterial whether the property in the goods passes in one State or another. Some of these decisions are: Tata Iron Steel Co. Ltd. v. S.R. Sarkar [1960] 11 S.T.C. 655 (S.C.); [1961] 1 S.C.R. 379., Kelvinator of India Ltd. v. State of Haryana [1973] 32 S.T.C. 629 (S.C.); [1974] 1 S.C.R. 463., Oil India Ltd. v. Superintendent of Taxes [1975] 35 S.T.C. 445 (S.C.); [1975] 3 S.C.R. 797., Balabhagas Hulaschand v. State of Orissa [1976] 37 S.T.C. 207 (S.C.); [1976] 2 S.C.R. 939., and Union of India v. K.G. Khosla Co. (P.) Ltd. [1979] 43 S.T.C. 457 (S.C.); [1979] 3 S.C.R. 453., In our opinion the terms of the agreement dated February 9, 1970, summarised above make it quite clear that the sales of naphtha to the 5th respondent were inter-State sales. Under clause 4 of the agreement the seller is "to make the supply of naphtha to the buyer from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 read with clause 8 also proves that really there are no two movements but only one movement from Barauni to Kanpur pursuant to the contract of sale and the arrangement regarding storage facilities provided in clause 8 is only for operational convenience; it is only a mechanism devised to facilitate the transfer of naphtha through the seller's pipeline to their depot at Kanpur and from there to the buyer's factory at Kanpur through the pipeline constructed at the buyer's cost. It is relevant in this connection to note that under clause 7(ii) the cost of transferring naphtha from Barauni to the buyer's fence is to be borne by the buyer. Each case turns on its own facts and the question is whether applying the settled principle which we have mentioned above to the facts of the present case the sales can be said to be inter-State sales. An attempt to show that some of the factors present in the instant case are present or absent in some case or other in which this Court held the sale to be a local sale or inter-State sale hardly serves any useful purpose. On the facts of the present case the sales are clearly inter-State sales and the State of U.P. had therefore no jurisdiction to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
