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TMI Blog1951 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... (the grounds will be considered in an order different from the one found in the application for revision) relates to a sum of Rs. 6,979-0-9 in respect of the Jabalpur shop and Rs. 1,955-6-0 in respect of the Damoh shop. Exclusion from the tax- able turnover was claimed on the plea that the amounts represented the value of sales to registered dealers or dealers, who in any case, were likely soon to get themselves registered. The position in this respect during the first quarter was rather unique. The date pres- cribed by the Provincial Government under the proviso to Section 8(1) was 31st August, 1947. By this date all dealers, who were liable to (1)[1951] N.L.J. 515; 3 S.T.C. 13. taxation under the Act, were required to get themselves registered; and the registration so made was to take effect from the commence- ment of the Act, so far as its penal provisions were concerned. Secondly, sales to such dealers during the period 1st June, 1947, to 31st August, 1947, even though they may not have been registered on the date of sale, were allowed to be regarded as sales to registered dealers, provided that they applied for registration within the date fixed. In the case of the amounts m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration by 31st August, 1947, it should be regarded more as a matter of grace than as a right conferred by law. The case for grace ceases when the vendee has defaulted on the date prescribed. 4. The third ground is in respect of a sum of Rs. 80,047-2-3 re- presenting the turnover of sales effected on orders received prior to 1st June, 1947, the date on which the Act came into force. It has been argued that the amount is not liable to assessment, in view of the proviso to Section 4(1) of the act; and, even if it should be held otherwise, the case for exemption has been urged under Section 4(1) itself. Now, under the proviso, no tax is payable "on sales made in the course of the execution of a contract, which is shown to the satis- faction of the Commissioner to have been entered into before the commencement of this Act." The word "contract" has been defined in a special sense in clause (b) of Section 2, which is reproduced below: "2. (b) 'Contract' means any agreement for carrying out for cash or deferred payment or other valuable consideration- (i) the construction, fitting out, improvement or repair of any building road, bridge or other immovable property, or (ii) the installat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied for indent of wagons. The purchasers were informed that on receipt of wagons the goods will be loaded and R.R. sent through Bank or direct. The following goods were despatched after 1st June, 1947, in execution of old orders. (Here follow certain details regarding the total amount involved, i.e., Rs. 80,047-2-3). As soon as the goods were despatched, bills were drawn against the purchasers; goods accounts were then credited and the purchasers accounts debited. If the goods are damaged before loading the wagons the responsibility rested with us. The property in these goods was transferred to the purchasers as soon as the goods were despatched according to bilti cut souda system." There is nothing to show in the statement of facts above, that the goods were appropriated towards the contract unconditionally after they were weighed. On the contrary, the admission that the applicant was to bear the risk of damage, if any, to the goods any time before they were railed and despatched should make it clear that there was no appropriation towards the contract and no transfer of property. On the facts stated by the applicant's own authorised agent, it is clear that the sales were effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dharmada, cartage, railway freight, godown rent, insurance charges etc., from us and deducts them from the sale pro- ceeds and the balance is remitted to us. The agent sells the goods, on our account to the customers and shows them accordingly in the accounts." 6. The accounts given above is of the dealings of the Damoh shop, but it applies also to the dealings of the shops at Jabalpur and Sagar. The veracity of this account does not appear to have been challenged or even suspected either by the Assessing Officer or by the Sales Tax Commissioner. On the facts stated, they held that the des- patch of goods to the Calcutta firm involved a transfer of property in them for deferred payment. The relevant parts of their orders should be reproduced for a proper adjudication of what is really the most im- portant ground urged in revision. Here is what the Sales Tax Officer says: "The dealer contends that the Calcutta company did not send any supply order but after selling the goods in Calcutta market remitted the balance of sale proceeds. 'Sale' as defined in the C.P. and Berar Sales Tax Act means 'any transfer of property in goods for cash or deferred payment'. The Calcutta company as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , was a pakka adatia of the applicant. The terms of the agreement between the parties do not appear to have been reduced to writing, but the position has not been seriously challenged by the learned counsel for the State, who also agrees that in a case of pakki adat, the trans- actions are between principal and principal. He points out that the applicant has been sending goods regularly to the Ganesh Co., at Cal- cutta and suggests that the presumption underlying such regular despatch is that there is an implied contract between the parties, if not an express one, prior to the despatch. The contract of sale having thus taken place, while the goods were still in the Province, the sale should be deemed to have taken place in the Province, even though the actual physical transfer of the goods might take place outside. On behalf of the applicant, it has been urged that these are not the impli- cations of the pakki adat system. For deciding this case, it does not appear necessary to go into the intricacies of that system in any great detail. But the following from the standard work on the subject of R.R. Mody, based on certain judgments of the Bombay High Court is worth reproducing: " ..... X X X X Extracts X X X X X X X X Extracts X X X X
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