9911796707
TMI Blog1967 (7) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... Andhra Pradesh including Hyderabad. During the years 1960-61 to 1964-65 and 1966-67 up to October, 1966, it was dealing in iron and steel, electrical goods, sanitary wares, paints, cement, hardware materials, manure, cloth, yarn etc. and was being assessed to tax under the Madras General Sales Tax Act on the turnover relating to the business. The gross turnover of the petitioner included sales of yarn by Madurai Mills Limited to the petitioner at its head office in Madras and also branches. The usual manner in which yarn was purchased was this. The head office used to place orders from Madras on Madurai Mills Limited after receiving quotation of price of yarn and supplies were made by the Madurai Mills either to the petitioner's head offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the State out of the stock transferred from branches in the States of Andhra Pradesh and Kerala were not liable to tax. There is no dispute that the sales by the Madurai Mills to the petitioner in which deliveries were made to branches in the States of Andhra Pradesh and Kerala have been charged to tax under the provisions of the Central Sales Tax Act. But the point in controversy is whether the sales made locally of yarn transferred to this State from the stocks of yarn in the States of Andhra Pradesh and Kerala referable to inter-State sales already charged to tax, are again liable to tax as first sales in the State of Madras. In order to appreciate the point we may notice the relevant statutory provisions. Section 3 of the Madr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Act is the charging section, and section 8 prescribes the rates of tax on inter-State sales. Under section 14 cotton yarn, but not including cotton yarn waste, has been declared to be of special importance in inter-State trade or commerce. Section,15 as amended in 1958 by Act 31 of 1958 is as follows: "Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely: (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed two per cent. of the sale or purchase price thereof, and such tax shall not be levied at more than one stage; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State, though of inter-State character, according to the argument of learned counsel for the petitioner, there cannot again be a first sale of the same goods inside the same State, for, it is from the inside sale, which is the first sale in the State, the inter-State sale, which has been charged to tax, has been carved out under the provisions of sections 3 and 4 of the Central Act. On the other hand, for the revenue the contention is that the inside sale, which followed the inter-State sale, is the first sale in the State, and as under section 6 of the local Act the tax therein is in addition to the inter-State sales tax, the State is entitled to tax the sales as first sales. It is maintained that the moment the goods are taken outside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of this case. Possibly it may even be argued in that case that once a sale is held to be an inside sale under section 4 but it is also an inter-State sale under section 3, there cannot be a subsequent sale inside the State which can be regarded as a first sale for the purpose of the local Act. The course of transaction as described in the affidavit and which has not been traversed in the counter statement is that Madurai Mills pursuant to the orders placed by the petitioner put the goods on rail destined to the States of Andhra Pradesh and Kerala and the price was paid in the State of Madras. Quite apart from section 4 of the Central Act, that will be an inside sale and also the first sale in the State. Even under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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