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TMI Blog1968 (12) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5(vii) of the General Sales Tax Act, 1125, the sale of goods specified in column (2) of Schedule I shall be liable to tax only at such single point in the series of sales by successive dealers as may be specified by the Government by notification in the Gazette; and, where the taxable point so specified is a point of sale, the seller shall be liable for the tax on the turnover for which the goods are sold by him at such point. By the notification dated 28th of September, 1957, the taxable point in respect of wines and liquors other than toddy was specified as the first sale in the State by a dealer who is not exempted from taxation under section 3(3) of the General Sales Tax Act, 1125. There is no case that the assessee was exempt from taxation under section 3(3) of the Act. It is agreed that even under the Kerala General Sales Tax Act, 1963, liquors and wines are taxable at the point of first sale in the State by a dealer who is not exempt under section 5, the charging section in that enactment. The United Breweries Ltd., Bangalore, are the manufacturers of U.B. Light Lager Beer and U.B. Sun Lager Beer. McDowell Co. Ltd., Shertallai, was appointed by the United Breweries Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir stock until receipt of the concerned invoices. 5.. We will not sell the aforesaid brands of beer to anyone in Kerala State except through you. 6.. This appointment shall be for a period of five years from the date hereof and will be renewed for a further period by mutual consent. It may, however, be terminated by you or by us by giving three months notice in writing." The assessee's claim for exemption is because of the plea that the sales to their customers are not first sales in the State to attract liability to tax. According to the revenue the sale of the two brands of beer to the assessee is by the United Breweries Ltd., Bangalore, and the assessee is therefore the first seller in the State. The question to be decided is whether the sales by the assessee of the two brands of beer are the first sales in the State. The learned Single Judge held that the movement of goods from Bangalore to Ernakulam had been occasioned by the sales by the United Breweries Ltd., Bangalore, to McDowell Co. Ltd., Shertallai, and the movement took place in pursuance of such sales. According to clause 3 of exhibit P1 the assessee has to pay the duty payable by the Shertallai branch of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Sales Tax Act which defines an inter-State sale is in these terms: "A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1.Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2.-Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State." The principle is well-settled by the decisions of the Supreme Court that a sale occasions the movement of goods from one State to another within the meaning of section 3(a) of the Central Sales Tax Act, when the movement is the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the State Trading Corporation case(4) in so far as the assessment for the assessment year 1957-58 was concerned, this court applied the principles laid down in Tata Iron and Steel Co. case(1). Accordingly we hold that the High Court was wrong in holding that before a sale could be said to have occasioned the import it is necessary that the sale should have preceded the import." The learned Government Pleader mainly relied on the above decision and contended that though there was a sale in favour of the assessee only after the import, the said sale occasioned the movement of goods and the sale to the assessee is therefore an inter-State sale. It is no doubt true that the learned Single Judge has distinguished Khosla's case[1966] 17 S.T.C. 473. on the ground that it was open to McDowell Co. Ltd., Shertallai, to divert the goods for any other purpose although the goods had been consigned in the name of the assessee. According to the learned Government Pleader in view of clause 5 in exhibit P1 the view of the learned Single Judge is not correct and therefore Khosla's case[1966] 17 S.T.C. 473.should govern this appeal. In our view it is not necessary to consider this aspect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alore, it will be an inter-State sale, even if the passing of title to McDowell Co. Ltd., Shertallai, was at Ernakulam. But we are at a loss to understand, how any subsequent sale by McDowell Co. Ltd., Shertallai, to the assessee even though before the receipt of the goods by the assessee can make it an inter-State sale. On the other hand, if the title to the goods passed to McDowell Co. Ltd., Shertallai, at Bangalore and the movement of goods was occasioned as an incident to the contract of sale between McDowell Co. Ltd., Shertallai, and the assessee or if there was a contract of sale by the United Breweries Ltd., Bangalore, to the assessee and the movement of goods was occasioned as an incident of that contract there is considerable force in the plea of the learned Government Pleader. On the materials available, we do not find any reason to differ from the conclusion reached by the learned Judge that the turnover in respect of sales of the two brands of beer received by the assessee from the United Breweries Ltd., Bangalore, is not liable to sales tax. The next contention of the Government Pleader was based on rule 27(5) of the General Sales Tax Rules, 1125, and rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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