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TMI Blog1966 (9) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... t its sales of oil-seeds to a Nagpur merchant worth Rs. 2,74,965.77 were sales in the course of inter-State trade or commerce and, therefore, not taxable under section 18(4) of the Madhya Pradesh General Sales Tax Act. The nature of these transactions was that the Nagpur buyer gave to the assessee a standing instruction for the purchase and supply of the goods to him. Pursuant thereto, the assessee purchased the goods in question appropriating them to the account of the Nagpur purchaser debiting him with the purchase price, adhat etc. Intimation of the purchases were in due course sent by it to the Nagpur merchant and on receipt of instructions from him, it sent the goods to parties outside the State. Such despatch instructions were receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assisting it to draw up a further statement of facts, but despite notice the assessee preferred to remain absent. We have reasons to believe that the assessee has deliberately withheld the relevant documents like the account books, bill-books, sales tax register, railway register and the correspondence pertaining to the contract in question, because their production was felt by the assessee to be detrimental to its interest. 4.. Nevertheless, the facts are really not in controversy. In dealing with the transactions, the first appellate authority stated: "From the records, it is found that the appellant received order for the purchase and supply of goods from Ramkishan Agarwal of Nagpur. Pursuant to these contracts of sales, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lent as to when the movement should take place and it only lays down that the sale must occasion the movement of the goods and, if the movement takes place, no matter when, it would be an inter-State sale. It is further argued that section 3 does not lay down that the movement should take place from the State of the seller to the State of the buyer. It is not disputed that there was a standing order for the purchase and supply of goods from the Nagpur merchant and the appellant purchased and supplied the goods from them and informed them about it. It means that the property in the goods had passed to the Nagpur buyer from the time of their unconditional appropriation. In all his correspondence, he has referred these goods as his goods. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Hence, there is no manner of doubt, that though there is a movement of goods from Madhya Pradesh to several places in Madras State, such movement is not in consequence of a contract of sale by the appellant with the Nagpur merchant. The movement has taken place in order to fulfil the contracts of sales or in consequence of sales by the Nagpur merchant to the Madras parties. So, it cannot be said that there is a movement of goods as a direct result of sale or as part or covenant of a contract of sale by the appellant with the Nagpur party. In view of this, the transactions sought to be taxed, cannot be treated inter-State sales, because the transactions have not occasioned the movement of the goods." 5.. What are the sales in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract of sale, and property in the goods passes in either State." The nature of transactions as found by the Tribunal in the case before us clearly shows that property in the goods sold by the assessee did not pass during their movement from the State of Madhya Pradesh to another State by any transfer of documents of title; nor was the movement of such goods from the State to places outside was as a direct result of any covenant or incident of the contract of sale. On the contrary, the contract of sale with the Nagpur buyer had been completely carried out within the State of Madhya Pradesh itself, wherein the price was received by sending the documents of title to the buyer. The subsequent movement of the goods to places outside th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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