9911796707
TMI Blog1972 (1) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ory in Madras State to the nominees of the outside State buyers from the levy of Central sales tax. Aggrieved against the observations made by the Tribunal as to the nature and character of an inter-State sale, and the restricted scope of its remand order the assessees have come to this court. The nature of the transactions covered by the disputed turnovers is substantially the same in both the years and they are set out below. The assessees are manufacturers and dealers in asbestos sheets at Podanur in Madras State. According to the assessees the turnovers in dispute represented transactions wherein the out-of-State buyers or their authorised agents or nominees collected and took actual delivery of the goods sold to them at the assessees' factory at Podanur and moved the goods at their own risk and cost. To substantiate that contention the assessees had produced some authorisation letters showing that the out-of-State buyers had authorised their agents or nominees to take delivery of the goods and arrange for their transport from the assessees' factory at Podanur. One of such letters is as follows: "S. Gopal Kamath, Post Box No. 13, Cannanore. Dated 4th May, 1966. Messrs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not the price quoted for delivery in wagon loads in the region or area allotted to the stockist. The assessing authority considered the above contention of the assessees and held that the transactions in question are inter-State sales as the movement of the goods outside the State is closely linked with the sale of the goods. In its view the invoices, gate passes and declarations in form XX prepared and issued by the assessees themselves indicated that they as sellers entrusted the goods to public carriers such as lorries for transport to out-of-State destinations and even if the sales are treated as intra-State sales, as the transactions of sale by the assessees to their stockists outside the State had clearly occasioned the movement of goods from this State they would be inter-State sales. The appellate authority also took the same view mostly relying on (i) the despatch chalan issued by the assessees to the out-of-State buyer which was in the following form: "Please receive from Asbestos Cement Limited the following materials and return duplicate duly signed" and indicated (1) the name and address of the out-of-State buyer, (2) vehicle number to which the goods were entrusted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees as per their instructions, the other transactions will have to be treated as inter-State sales. The matter was, therefore, remanded to the Appellate Assistant Commissioner to find out and exclude the turnover relating to such of those cases where authorisation letters have been produced from the out-of-State buyers to deliver the goods to their agents or nominees. Mr. V.K. Thiruvenkatachari, learned counsel for the petitioners, contends that the Tribunal is in error in construing the foot-note in the printed price list as indicating that in all cases the prices charged by the assessees included the freight charges up to destination stations. It is stated that the Tribunal has overlooked the fact that the price list gives two prices, one for delivery "ex works" and the other for "delivery in price field" in wagon load, and that the foot-note in the price list indicated that it is only alternative price that is quoted in the price list which includes freight charges to the destination stations and not the prices quoted for ex works delivery. It is stated that, as the delivered prices are uniform for particular areas or fields, different prices are fixed for different areas or f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where such sale or purchase takes place in the course of inter-State trade or commerce". In ascertaining the scope of the said provision the courts had naturally to find out as to what is a sale in the course of inter-State trade or commerce. In Larsen and Toubro Ltd. v. joint Commercial Tax Officer[1967] 20 S.T.C. 150., Veeraswami, J. (as he then was) speaking for the Bench has, if we may say so with respect, succinctly traced the development and history of the law relating to inter-State sales, both prior to and after the enactment of the Central Sales Tax Act. We are in entire agreement with the exposition of law contained in that decision, and in our view, it is unnecessary to restate the same once again. That decision takes note of the following decisions of the Supreme Court in The State of Bombay v. United Motors (India) Ltd.[1953] 4 S.T.C. 133 (S.C.)., Bengal Immunity Co. Ltd. v. The State of Bihar[1955] 6 S.T.C. 446 (S.C.)., Sundararamier and Co. and Others v. State of Andhra Pradesh[1958] 9 S.T.C. 298 (S.C.). and Ashok Leyland Ltd. v. State of Madras[1961] 12 S.T.C. 379 (S.C.)., which are considered to be the landmarks in the development of the law relating to the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the movement of the goods from one State to another by transfer of documents of title thereto come within the purview of section 3(b) and that the two kinds of sales are distinct and different and are mutually exclusive. As per the above decision while the essence of the inter-State sale or purchase under section 3(a) is that the inter-State movement of goods springs from the terms of the contract of sale or purchase or is incidental thereto or arises out of it, the movement of goods not necessarily being preceded by an agreement of sale or purchase, the inter-State sale or purchase under section 3(b) takes place during the movement of the goods from one State to another by transfer of documents of title to the goods, and the dividing line between sales or purchases under section 3(a) and those under section 3(b) is that in the former the movement of goods is under the contract of sale or purchase but in the latter the contract comes into existence after commencement but before termination of the inter-State movement of the goods. In both the classes of inter-State sales or purchases under section 3(a) and 3(b) what is contemplated is completed sales though how the sales or purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent movement of the goods cannot be taken to be in pursuance of or incidental to the contract of sale which has already been completed by actual delivery to the buyer or the buyer's nominee within the State. The authorities below have placed strong reliance on the fact that in the delivery note issued by the assessees in form XX for check post purposes they are shown as the sellers and the out-of-State dealers as buyers, and that it is not stated therein that the driver of the lorry to whom the goods are delivered was the buyers' agent. But, in our view, the entries in form XX will not be conclusive on the question as to whether the movement of the goods was directly from the seller to the buyer. It is strongly urged on behalf of the revenue that the assessees have in fact produced C forms in most of the cases and that after production of such C forms, they are estopped from contending that the transactions in question are not inter-State sales. As against this, the learned counsel for the assessees points out that the assessees got the C forms from the out-of-State buyers and produced the same before the assessing authority only by way of abundant caution after receivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o substantiate the fact of actual delivery within the State to the buyer or buyer's nominee by production of the buyer's authorisation letters but that the factum of actual delivery to the buyer or his nominee at their factory inside the State could be verified with reference to the prices charged. We have already held that out of the two prices (1) ex works price and (2) delivered price, if the assessees have charged only the ex works price, it should be taken that they had effected actual delivery to the buyer or his nominee at their factory. We, therefore, hold that the assessees are entitled to relief in respect of all the transactions in relation to which they have either produced authorisation letters from the out-of-State buyers to effect deliveries at the factory to their nominees or shown that they have charged only ex works price. In this view, while upholding the order of remand made by the Tribunal, we direct the appellate authority to exclude those transactions from the assessment under the Central Sales Tax Act where the assessees have charged ex works price in their invoices treating them as local sales not occasioning the movement of the goods from the State of Tami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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