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TMI Blog1972 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 65,47,342.29 is said to have been shown in the returns because the money transactions relating to this turnover had passed through the books of the Madras office which had administrative control over the southern region. This claim for exemption was allowed by the assessing authority and final assessment was made on 31st January, 1966. Subsequently, by a notice dated 28th November, 1969, the assessing authority had proposed to redetermine the total and taxable turnovers of the petitioner for 1964-65 under the Central Sales Tax Act at Rs. 1,72,66,468.92 and Rs. 1,64,66,957.38 respectively, by including the turnover of Rs. 65,47,342.29 representing the sale value of goods which had moved from Bombay to the State of Tamil Nadu or to other neighbouring States of Andhra Pradesh, Mysore and Kerala. The proposal was objected to by the petitioner, but the assessing authority overruled those objections and by his order dated 31st December, 1969, refixed the total and taxable turnovers under the Central Sales Tax Act as proposed. The petitioner has filed the above writ petition challenging the revised assessment order passed by the respondent. The petitioner's factory is located in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 15,55,104.64. The petitioner contends that the transactions covered by the disputed turnover directly fall under section 3(a) of the Central Sales Tax Act, the goods having been appropriated and moved from its factory in Bombay to the buyer's place in pursuance of contracts of sale. The petitioner also contends that in respect of the despatches from Maharashtra State to the customers in all the four States comprised in the southern region, the tax under the Central Sales Tax Act will be exigible only in the State of despatch, and that the State of Tamil Nadu had no jurisdiction whatsoever to tax these transactions, even if the transactions are taken to fall under section 3(b) of the Central Sales Tax Act as a result of the transfer of documents of title by the Madras office as contended by the respondent. Mr. V.K. Thiruvenkatachari, learned counsel for the petitioner, further contends that the disputed transactions are inter-State sales under section 3(a) of the Central Sales Tax Act, as the contracts of sale had occasioned the movement of the goods from Maharashtra to the four southern States, that they are not sales effected by transfer of documents of title to the goods fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the same goods will come under section 3(b). Section 6(2) of the Central Sales Tax Act which states that where a sale in the course of an inter-State trade or commerce of goods of the description referred to in sub-section (3) of section 8 has occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title of such goods during their movement from one State to another, any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subject to tax under this Act, is relied on by the petitioner in support of its contention that the sales by the Bombay office to the various customers in the four southern States which have occasioned the movement of the goods from Bombay to the concerned States would come under section 3(a) and that once they have been taxed under that section by the State of Maharashtra, the subsequent transfer of documents of title by the Madras office, even if it is treated as a transaction of sale, cannot be brought to tax by this State. As against these contentions, the stand taken by the respondent is that the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made in the case of unascertained goods determines both the situs of such a sale as well as its character as an inside sale. Once a sale is fixed as having taken place inside a State, with reference to such tests, it should be deemed to have taken place outside all other States. While providing for this, sub-section (1) of section 4 makes it subject to the provisions contained in section 3. The opening words of sub-section (1) of section 4 in effect mean that section 3 controls the scope of sale or purchase inside a State which is necessarily a sale or purchase outside all other States. In our opinion, having regard to the definitions of 'appropriate State' and 'place of business' and the language employed by sections 3 and 4, a sale or purchase inside a State as defined by section 4(2) is the starting point and out of such sale or purchase is carved out and separated a sale or purchase, which occasions the movement of goods from one State to another or is effected by transfer of documents of title to the goods during their movement from one State to another and by this process such an inter-State sale or purchase is distinguished and excluded from an outside sale or purchase. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders placed by the various customers at Bombay when the goods were put on rail, there will be clearly a sale under section 3(a) as the contract of sale has occasioned the movement of the goods after the appropriation had taken place at Bombay. If there is an inter-State sale under section 3(a) by the head office at Bombay to the customer, the same transaction cannot be simultaneously treated as an inter-State sale falling under section 3(b) taking advantage of the fact that the railway receipts have been endorsed by the Madras office in favour of the buyers on receipt of the price of the goods. We are clearly of the view that it is not possible to invoke simultaneously both the sections 3(a) and 3(b) in respect of the same transaction. Unless it is presumed that a sale has taken place by the head office at Bombay to its branch office at Madras, it is not possible to say that the branch office has effected an independent sale under section 3(b) to the same customer. A similar point was raised in Tata Oil Mills Ltd. v. State of Andhra Pradesh[1971] 28 S.T.C. 619. In that case, the goods had been despatched by the assessee's principal, one T.C. Ltd., Mithapur in the State of Gujara ..... 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