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TMI Blog1971 (1) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... 55, claimed that its turnover to the extent of Rs. 13,03,041.44 was in respect of sales which took place outside the State and this turnover was not taxable by the State of Madhya Pradesh in view of article 286(1)(a) of the Constitution as it stood prior to the Constitution (Sixth Amendment) Act, 1956. Similar exemption was claimed for the year 1955-56 in respect of a turnover amounting to Rs. 20,04,025.47. Another exemption that was claimed for both these years was in respect of sales made to the Madhya Pradesh Electricity Board. It was claimed by the petitioner that sale of cement to the extent of Rs. 10,206.25 for the year 1954-55 and to the extent of Rs. 3,11,973.62 for the year 1955-56 was made to the Board under certificates which showed that the cement was used for generation and distribution of electrical energy and was exempt from tax under section 2(j)(a)(iii) of the Central Provinces and Berar Sales Tax Act, 1947. Both these contentions were not accepted by the Assistant Sales Tax Commissioner. 4.. The manner in which the alleged outside sales took place is pleaded in paragraphs (2) to (6) of the petitions which are admitted in the return filed on behalf of the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying capacity of the wagon available. 6.. You should take delivery of the consignment on indemnity bond if railway receipt is not received by you in time. We will not be responsible for any demurrage incurred on account of non-receipt or delay in receipt of railway receipt. 7.. Sales tax, octroi, town duty, etc., are payable by the buyers. Supplies from the works will be subject to the sales tax/taxes wherever chargeable. 8.. In case it is not possible to supply the whole or part of the quantity of your order, the amount of your advance or the balance thereof (if any) as the case may be, will be refunded without interest on application. 9.. The cement supplied shall not be resold by you but will be used for your own consumption nor shall the cement be transported to any other place from the station mentioned. 10.. The sale will also be subject to the terms and conditions of our standard form of contract for sale of cement. 11.. In case of orders for bagged cement only: Please note that supply against the above order is not guaranteed in any particular type of packing but will be made either in jute bags or paper bags whichever packing is available or practicable at the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pects were complete once the goods were delivered at the works siding and appropriated to the contract as the entire responsibility from that moment shifted to the buyer. 6.. In our opinion, the conclusion reached by the Assistant Commissioner cannot be upheld. The apparent error in his order is that he has given attention only to the place of notional delivery, the passing of property in goods and the shifting of responsibility in respect of payment of freight, loss etc. and has not directed his attention to the main question as to where the actual delivery of the goods took place. Under the explanation to article 286(1)(a) of the Constitution a sale or purchase is deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the consumption in that State, notwithstanding the fact that under the general law relating to sale of goods, the property in goods has by reason of such sale or purchase passed in another State. It has been settled by a series of decisions of the Supreme Court that the expression "actually delivered" in the context in which it is used in the explanation "can only mean physical deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of these authorities, the question in the present petitions is whether on the terms and conditions on which the cement was sold by the petitioner-company to outside purchasers can it not be said that the sales qualified for exemption under the explanation? It is quite plain that the goods were never put in the possession of the purchasers in the State of Madhya Pradesh; the purchasers got possession of the goods at the destination in different States where they were despatched under the contract of sale by the seller. It is true that under the general law the property in goods passed to the purchaser when the goods were loaded in the railway wagons at Kymore and the risk also passed to the purchasers who were also liable to pay the freight; but these incidents do not lead to the conclusion that the place of actual delivery was Kymore. As already noticed, by "actual delivery" is meant physical delivery of the goods or such other action as puts the goods in the possession of the purchaser. The delivery in that sense was effected only when the goods reached the destination and were taken delivery of by the consignees. Under the terms of the authorisation of the Government as also u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner is that the cement was used in the construction of buildings needed by the Board to house its staff and office. This is a finding of fact and must be accepted in these proceedings. On this finding it was argued for the petitioner that the cement was used by the Board in the generation or distribution of electrical energy, for the buildings constructed by use of the cement purchased had assisted the Board in these activities. The sales that qualify for exemption under section 2(j)(a)(iii) of the Act must be one that are made to any undertaking supplying electrical energy "for use by it in generation or distribution of such energy ". Everything sold to the Electricity Board for its use does not fall within the exemption. It is only when sale is made for use in the generation or distribution that the exemption is attracted. Cement used for construction of office buildings and staff quarters cannot be said to be used in the generation or distribution of electrical energy. The connection between these activities of the Board and its office building and staff quarters is too remote and it cannot even be said that these buildings are used in the generation or distribution of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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