9911796707
TMI Blog1966 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the sales tax illegally levied, by their letter dated 7th March, 1965. The first respondent gave a reply to the petitioner refusing to refund the sales tax realised from the petitioner. Exhibit P-1 is the copy of the reply. The prayer in the petition is for quashing exhibit P-1 and for issuance of a writ of mandamus directing the respondents to refund the tax collected from the petitioner. On behalf of the first respondent, a counter-affidavit has been filed and in the counter-affidavit it is stated in para 7: "For supplying petrol and diesel oil to contractors in the Pothundi Irrigation Project and for other purposes the Government purchased petrol and diesel oil from the Burma Oil Company at Pollachi who delivered the same in the pump installed in the workshop compound at Pothundi from where the department regularly supplied petrol and diesel oil to the contractors including the petitioner realising the price thereof from them. The purchase by the State was an interState one taxable under the Central Sales Tax Act and not an intraState one. In doing so the Government was carrying on an adventure or concern in the nature of trade or commerce and as such the Government is a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had to consider this question. The first appellant before the Supreme Court was the sales manager of the second appellant there, who was manufacturing cement and was having factories in different parts of India outside the State of Mysore. The first appellant with its head office in Bombay and a branch office in Bangalore was a registered dealer under the Mysore Sales Tax Act, 1948. Persons desirous of buying cement had to get an authorisation in a standard form which authorised the first appellant to sell and supply cement in quantities and from the factory mentioned therein. The buyer then placed an order with the first appellant who accepted the order and instructed its Bombay office to despatch the cement in accordance with the instructions of the buyer and the authorisation. A copy of the letter of instruction was sent to the factory from where the goods were to be despatched and the particulars of the authorisation were mentioned therein. Thereafter the first appellant sent an advice to the buyer enclosing therewith the railway receipt for the goods and the particulars of the authorisation. Both the contract of sale and the advice stated that the goods were being despatched a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and diesel oil from Government. There was no obligation on the part of the petitioner to purchase petrol or diesel oil from Government. The provision in clause 5 of the special conditions of agreement is as follows: "If the contractor requires petrol or high speed diesel oil the same can be supplied from the pump installed in the departmental workshop compound and the cost of the same will be recovered in cash at the following rates: Petrol at Re. 0.71/litre, diesel oil at Re. 0.63/litre." It cannot be said that the so-called contract involved the movement of goods from Pollachi to Pothundi. Nor can it be said that the movements of goods were the necessary result of the contract. The fact that Government purchased petrol and diesel oil from Pollachi and transported the same to Pothundi in the Kerala State with the idea of supplying the petrol and diesel oil to persons like the petitioner would not make the movement of goods across the border, a movement under the so-called contract with the petitioner. Government could as well have supplied the petitioner with petrol and diesel oil by purchasing them in the local market. There was no necessary connection between the movement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer" and the sales by Government to the petitioner were first sales which would attract liability to sales tax. Mr. Velayudhan Nair submitted that the ruling in K.G. Khosla Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes[1966] 17 S.T.C. 473.is decisive of the question in favour of the petitioner. In that case: "The assessee entered into a contract with the Director-General of Supplies and Disposals, New Delhi, for the supply of axle-box bodies. The goods were to be manufactured in Belgium, according to specifications and the D.G.I.S.D., London, or his representative had to inspect the goods at the works of the manufacturers and issue an inspection certificate. Another inspection was provided for at Madras. The assessee was entitled to be paid 90 per cent. after inspection and delivery of the stores to the consignee and the balance of 10 per cent. was payable on final acceptance by the consignee. In the case of deliveries on f.o.r. basis the assessee was entitled to 90 per cent. payment after inspection on proof of despatch and balance of 10 per cent. after receipt of stores by the consignee in good condition. The assessee was entirely responsible for the execution o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
