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TMI Blog1970 (4) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... les?" The facts are short and not in dispute. The assessee carried on business of manufacture and sale of jute goods at Kanpur within the State of Uttar Pradesh. The goods are supplied to the purchasers both inside and outside Uttar Pradesh. During the assessment year 1960-61 the assessee received orders for the supply of goods from parties mostly of Kanpur. One of the terms of the contract was that the assessee will despatch goods to the destination indicated by the purchasers subsequently. In pursuance of the despatching instruction received, the assessee despatched goods outside Uttar Pradesh worth Rs. 9,85,160 and another lot amounting to Rs. 73,160. The assessee claimed that these sales were inter-State sales and their turnover was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and as such the contract should be deemed to have been completed in Uttar Pradesh and the subsequent despatch of the goods outside Uttar Pradesh would be irrelevant. Precisely, a similar question arose before the Supreme Court in Amritsar Sugar Mills Co. Ltd. v. Commissioner of Sales Tax, Uttar Pradesh[1966] 17 S.T.C. 405 (S.C.). That was a case of an assessee who carried on the business of manufacture and sale of sugar. Some of the parties to whom the sugar was sold carried on the business inside Uttar Pradesh but the sugar was despatched to stations outside Uttar Pradesh in compliance with the instructions issued by the buyers. The assessee claimed rebate on such sales under section 5 of the Act which authorises rebate in respect of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Uttar Pradesh was clearly occasioned by the contract of sale and would be covered by subclause (a) of section 3 of the Central Sales Tax Act. The other consideration as to where the property passed to the buyers would be wholly immaterial. All that section 3(a) of the Central Sales Tax Act requries is that in order that a sale should be treated to be an inter-State sale the movement of goods from one State to another should be occasioned by the contract of sale. The case of Tata Iron and Steel Co. Ltd. v. S.R. Sarkar[1960] 11 S.T.C. 655 (S.C.). is a case on the point which may be cited with advantage. In that case it was observed by the Supreme Court that section 3 of the Central Sales Tax Act which deals with the inter-State trade and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court then on the facts of that case found that the movement of cement from another State into Mysore was the result of a covenant in the contract of sale or incident of such contract. The same principle has been followed by the Supreme Court in K.G. Khosla and Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras Division, Madras[1966] 17 S.T.C. 473 (S.C.)., which was a case under section 5(2) of the Central Sales Tax Act but as observed above the principle underlying the two sections is the same. We have thus no hesitation in holding that the movement of goods in respect of the sales in dispute in the instant case was occasioned by the contract of sale and such sales were, therefore, inter-State sales within the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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