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TMI Blog1976 (7) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of sugarcane. One of the forms of the agreement had been produced before us. According to the terms contained in the agreement, the cane shall be delivered at the factory premises of the petitioner herein and the petitioner shall pay the grower the statutory or controlled or Government minimum price for the accepted sugarcane after inspection and weighment subject only to deduction of any advance, mutually agreed to in writing between the grower and the occupier, prior to such delivery. For the purpose of purchasing the sugarcane so contracted for from the growers, admittedly, the petitioner opened offices at Coimbatore and Pollachi. In those offices, the sugarcane inspectors of the petitioner were functioning. They visited th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the learned counsel, the sales in this case took place in the course of inter-State trade and did not constitute local sales taking place in Tamil Nadu and, therefore, could not have been taxed under the provisions of the Tamil Nadu General Sales Tax Act, 1959. In support of this contention, the learned counsel for the petitioner placed reliance on the following facts: 1.. In the agreement entered into between the growers and the petitioner there was a specific stipulation for the delivery of the sugarcane by the growers at the factory premises of the petitioner at Kerala; 2.. There was the provision for payment of price as fixed by the Government or the controlled rate after inspection and weighment at Kerala and the said pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the growers in view of the terms contained in the contract to the effect that the sugarcane should be delivered only at the factory site at Kerala. We are of the opinion that the fact that the written contract entered into between the parties provided for the growers supplying sugarcane at the factory site in Kerala did not in any way preclude them from coming to an understanding that in respect of the very same sugarcane contracted for, the petitioner can take delivery in the fields themselves and transport them to Kerala at its own cost and deduct the cost of transportation charges from the price payable to the growers at the rate contracted for. It is exactly this finding which has been arrived at by the authorities below. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner itself. If the entries contained in that form are wrong it is for the petitioner to establish the same and, in this case, apart from relying on the terms of the contract and the specimen bills in which the cost of transportation is deducted from the price of sugarcane payable to the growers, no other material was placed to show that such entries were not correct. Under these circumstances, we are unable to hold that the sales in the present case constituted inter-State sales and did not constitute local sales. Mr. Sastri, at one stage, contended that even if the property in the goods passed to the petitioner in Coimbatore District itself, still the sales will constitute inter-State sales. We are unable to accept this argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weighment of the goods at Gondia in performance of the terms of the contract. In our opinion, the movement of goods across the frontier was a direct and necessary consequence of the important covenant with regard to the fixation of price. It follows that the sales under the eight contracts were inter-State sales within the language of section 3(a) of the Central Sales Tax Act and were not liable to be taxed under the Madhya Pradesh General Sales Tax Act." In the second case, in two contracts there was a specific clause that the price would include railway freight from the loading station in Madhya Pradesh to the port of Vishakhapatnam in the State of Andhra Pradesh and that the balance of 10 per cent of the price was to be paid in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion after the delivery of the goods at the factory site and, therefore, till the goods are delivered and accepted In the factory site, there will be no concluded sale between the parties. We are unable to hold that the right of rejection at the factory site will necessarily involve the consequence that at no stage prior thereto, the property in the goods can pass from the seller to the buyer. If even after the property in the goads has passed, certainly it is open to the buyer to reject the goods and if the rejected goods had not been taken back and replaced by the seller, the right to claim compensation therefor is always available to the buyer. Under these circumstances, we are unable to hold that any error of law has been committed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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