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TMI Blog1967 (7) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... r were intra-State sales?" 2.. The facts of the case are that the assessee-firm deals in manganese ore extracted from a mine in Balaghat District. The assessee was assessed on the sales of manganese worth Rs. 1,04,070 on the basis that the sales were intra-State sales. The assessee had claimed deductions for the sales worth Rs. 34,568.35 nP. on the ground that the sales were interState sales exempt from the State tax. This claim was negatived by the Sales Tax Authorities; but the Tribunal upheld it. 3.. The sales in question were effected in favour of Messrs. Rambahadur Thakur & Co., Nagpur, and Balkrishna Trading Co., Nagpur, under the contracts dated 17th October, 1957, and 8th April, 1958, respectively. Under both the contracts the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exact weight of the ore was determined at the weigh-bridge at Gondia-a place outside the State of Madhya Pradesh. As the consignors and consignees of the goods in both the cases were the purchasers, there cannot be any doubt that the movement of the goods from Katangi to Gondia and onwards was at the instance of the purchasers. The Sales Tax Tribunal, however, held that inasmuch as under the terms of the contract the weight of the ore was to be ascertained at the weigh-bridge at Gondia, the movement of the goods from Katangi to Gondia was occasioned by the terms of the respective contract and hence the transactions were in the course of inter-State trade and commerce. 4.. The reasoning of the Tribunal is that after the amendment of Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The Tribunal specially relied on the following observation: "...... clause (a) of section 3 covers sales, other than those included in clause (b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State" (page 667) and held that as the movement of the goods from Katangi to Gondia for the purposes of determining the weight was in terms of the contract of sale, the matter was covered by clause (a) of section 3 and that the sales in question were inter-State sales. 5.. Undoubtedly, the case is not covered by clause (b) of section 3. It will have, therefore, to be seen whether the case falls within clause (a) of section 3. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the goods was not in furtherance of the sale transaction. He urged that the movement of the goods across the border of the State in pursuance of the contract must be for the purpose of delivery of the goods to the buyer and for no other purpose. In that case alone the test laid down by the Supreme Court would apply; but when the delivery of the goods is taken by the purchaser inside a State and the sale transaction is completed, there can be no question of invoking the aid of section 3 for determining the nature of the transaction. Shri Sen referred to the following observations from the judgment of' Tata Iron and Steel Co. Ltd.[1960] 11 S.T.C. 655. : "By the first part of the definition, in the case of sale of goods falling within cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sawar logs of the contract quality and description to the railways in terms of the contract without the reservation of any right of disposal has the effect of passing the property therein to Wimco at the railway stations in the Central Provinces under section 23 as well as of constituting delivery of them at the railway stations under sections 33 and 39(1). The argument is prima facie sound unless there be some other provision in the contract to negative this conclusion, e.g., that the logs must be carried to Ambernath and delivered there." The above-quoted passage illustrates the principle that it is only when a contract contemplates delivery of goods in another State that the sale could be said to be inter-State. In our opinion, in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the movement of the goods was not by reason of the sale but it was after the sale was completed and delivery was taken in the State by the buyer. Again, the movement was not for giving delivery of the goods to the buyer. We are, therefore, of the view that the sales in question were not in the course of inter-State trade. 9.. The Tribunal based its conclusion only on the basis that the final payment of the price was to be made after the buyer got the weight of the ore determined at Gondia weigh-bridge. The condition about payment of price on determination of the weight at Gondia weigh-bridge is for the purpose of ascertaining the exact weight. It is not a condition of sale. The Tribunal has found as a fact that the delivery of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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