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TMI Blog1956 (4) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... unal. The Tribunal also negatived the contention of the assessee, that the Commercial Tax Officer had no jurisdiction to revise the assessment made by the Deputy Commercial Tax Officer. Of the turnover, the liability to tax which was in dispute, the Tribunal held that about 12 1/2 lakhs alone fell within the scope of Article 286(2) of the Constitution. The Tribunal held that the balance of the turnover was on sales completed by delivery within the State to the agents of the buyers, who were no doubt resident outside the State, and that these sales were not in the course of inter-State trade, within the meaning of Article 286(2) of the Constitution. It was the correctness of that decision of the Tribunal that the assessee challenged by a petition presented under section 12-B of the Act. We are of opinion that the Tribunal was right in negativing the claim of the assessee-petitioner, that the Commercial Tax Officer exceeded his jurisdiction in the proceedings he took against the assessee under section 12 of the Act. The contention of the assessee both before the Tribunal and before us was, that the Commercial Tax Officer's revisional authority did not extend to an inspection of mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing authority. It was not the case of the learned counsel for the petitioner that the Commercial Tax Officer took any irrelevant material into consideration, even from among the records in the assessee's possession, which it was called upon to produce. We are unable to hold that there was anything even irregular in the exercise of the jurisdiction vested in the Commercial Tax Officer by section 12 of the Act. An idea of the extra-State organisation of the assessee in the sale of the cars and their accessories should help to decide the main question at issue before us, the liability to tax of the items of turnover still in dispute. The assessee appointed a "dealer" for each territorial unit, and the contract which the assessee entered into with that dealer, defined with precision the territorial area, within which the dealer had to carry on his selling operations. It should be convenient to adopt that nomenclature used by the assessee himself in the contracts, which he entered into, though it was the assessee that was the statutory dealer for the purpose of the General Sales Tax Act. The assessee sold its goods to the dealer, and the dealer in his turn sold the goods to his cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the dealer were meant for transport of those goods outside the State for delivery to the dealers whose residence was outside the State. That did not, however, alter the fact, that the delivery was effected to the dealer's representative within the State, and it was the dealer's representative, who ultimately delivered those goods to his employer. Whether such sales fell within the purview of Article 286(2) of the Constitution is the question. The turnover, the liability to tax which the assessee challenged, may for purposes of convenience be split up under four heads. (1) Rs. 1,43,072-4-0 represented the value of motor cars which were delivered ex-factory to the dealer's drivers. The cars were driven away by those drivers after a temporary registration of those cars under the Motor Vehicles Act in the name of the dealer himself. (2) Rs. 28,01,357-6-9 was the value of the cars delivered to the drivers of the dealers to be taken away to the place of business of the dealers outside the State of Madras. The only respect in which these sales differed from those included in item 1 was that no registration of the vehicle was effected in this State. The cars were driven away under the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scope of the principle laid down in The Indian Coffee Board, Batlagundu v. State of Madras(1). The question for determination in The Indian Coffee Board, Batlagundu v. State of Madras [1956] 7 S.T.C. 135. was whether the sale by the petitioner Board completed by delivery within the State of Madras to the purchaser or his agent came within the scope of Article 286(2) of the Constitution, because the purchaser bought the goods with the intention of transporting them outside the State? Our answer was: "a sale for transport outside the State does not alter the fact that the sale itself was an intra-State sale, a sale within the State of Madras. The subsequent transport by the purchaser is not part of the transaction of sale." The distinction between transport as part of the contract of sale, and transport after the completion of sale was pointed out by Venkatarama Aiyar, J., in the Bengal Immunity Co. case[1955] 6 S.T.C. 446 at page 583. Learned counsel for the petitioner referred us to a passage in the judgment of the learned Chief Justice in State of Madras v. K.H. Chambers Ltd.[1955] 6 S.T.C. 156 at page 172. "I must confess that but for the authoritative pronouncement of the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53] 4 S.T.C. 133 at page 166. The learned Judge observed: "A, a Bombay dealer, sells goods to B, a dealer in Madras, for consumption in Madras. I will assume that delivery is made to B himself in Bombay and that he carries the goods across in person. If that is the normal way in which trade and commerce in that particular line of goods flows across the boundary, then that would, in my opinion, be a sale in the course of inter-State trade and commerce despite the facts, including delivery, mentioned above. Ordinarily, goods of this nature are delivered to a carrier but that makes my point all the stronger. So long as the ban imposed by clause (2) remains the situs of the sale and the place of delivery are not material provided the sale is caught up in the vortex of inter-State trade and commerce." The obiter dicta of a learned Judge of the Supreme Court, even in a dissenting judgment are entitled to high respect, especially if there is no direct decision to conclude the question at issue. It is true that the passage in the judgment of Bose, J., we have extracted above, was not brought to our notice when we decided The Indian Coffee Board case(1). Our decision is a precedent we are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppose one dealer in a line of marketable goods, say, motor cars, takes up the position, "I know the association of my name with the goods I sell is of considerable importance in the market. I can offer to dictate the terms under which I shall sell my goods. I shall sell goods only to a person who comes to my premises, pays the purchase price, takes delivery of the goods and arranges himself for taking away the goods." Would that be sufficient to establish that that is the normal trade practice in that line of business? Similarly if a purchaser were to say, "I know I can avail myself of the facilities of transport, which the seller is prepared to offer. None the less it suits me to go to the seller, purchase the goods and take delivery of the same." Would that practice of a single buyer or even of a number of buyers from the same seller conclude the question, what was the normal trade practice in that line of goods. We have no hesitation in rejecting the plea, that the practice adopted by one set of buyers and sellers alone would determine the practice of the trade in the line of goods they handle. Reverting to the observations of Bose, J., which we have extracted above, we shall co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. , it was held that sales made by a natural gas producing company in the field to pipe line companies which transported the purchased gas to markets in other States were, though made before the gas left the State were sales in the course of inter-State Commerce. At page 1747 the learned Judge observed: "Nor are we impressed with the suggestion that the inter-State movement of the gas should be regarded as beginning when the gas, theretofore moving through petitioner's pipe line system at well pressure, is subjected to increased pressure, in that the gas may be moved to the distant markets. Long before the gas reaches the compressor pumps it has been committed to its inter-State journey which follows without interruption or deviation. Under such circumstances, the increase of pressure in the compressor stations must be regarded as merely an incident in the inter-State commerce rather than as its origin." There is no scope for applying the principles laid down in those two cases to the facts of the present case. We have pointed out that the transport of the goods purchased across the borders of the Madras State was not the concern of the seller. The sale was completed and delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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