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TMI Blog1977 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... Act as the State Government departments were not registered dealers. Since all the sales were to the Government departments, he issued notices to the assessee asking for its objection to the proposed assessment of the said turnover. The assessee pointed out that there was some pending legislation before the Parliament and wanted the assessment to be deferred till the passing of the said amendment. It questioned also the jurisdiction of the State to assess the said amount to tax. The assessing officer rejected these contentions. He found that the assessee entered into a contract with another entity in Bombay and that the Bombay entity despatched the goods to the respective executive engineers. He considered the sales to be taxable in this State under section 3(b). The assessee appealed and the appellate authority was of the view that the assessee had sold goods purchased from Maharashtra while on movement from Maharashtra to Kerala attracting liability to tax under section 3(b). The assessee, thereafter, filed a second appeal before the Sales Tax Appellate Tribunal. The Tribunal came to the following conclusions: 1.. The sale fell within section 3(a) and the State of Tamil Nadu h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions were put through. The assessee was one of the bidders for supply of caulking lead by a tender called for by the Government of Kerala. The assessee had bid for the tender in its own name giving its Madras address. The Chief Engineer, Public Health Department, Ernakulam, accepted the tender for supply of 500 tons of caulking lead at the rate of Rs. 5,290 per tonne. The supplies were to be made from time to time at agreed instalments. As regards price, it was stated that: "The price noted above is for delivery of the materials f.o.r. Ernakulam and inclusive of sales tax. Necessary declaration in form D will be issued by the Ex. Engineer, P.H., Central Stores Division, Ernakulam, Cochin-16, on receipt of the invoice." It was further provided that the goods must be insured to the destination, viz., f.o.r. Ernakulam, and that the goods should be despatched freight paid to the Ex. Engineer, P.H., Central Division, Cochin-16. Clause 4 provided as under: "The materials shall be despatched by goods train. If this is not found possible, the prior approval of the officer mentioned in clause 6 below to be obtained before despatch by passenger train." The consignment was to be pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above facts, it would follow that the assessee's sales squarely came within the scope of section 3(b) of the Central Sales Tax Act. If the assessee falls within the said provision, then section 9(1) specifies the State which is entitled to tax the said transaction. Section 9(1) provides that: "The tax payable by any dealer under this Act (viz., Central Sales Tax Act) on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of subsection (2) in the State from which the movement of the goods commenced." There is a proviso to it which runs as follows: "Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within subsection (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat was a case where an assessee in this State was effecting sales of goods to another assessee within the same State. But, here the seller is a party from Bombay who sold the goods to the assessee in this State, in the first instance, and the subsequent purchaser from the assessee was in Kerala and the goods were despatched from Bombay to Kerala. In these circumstances, that decision would have no application. There was no scope for any discussion or laying down of any principle in that case regarding the application of the proviso to section 9(1). The learned counsel for the assessee next contended that, in the present case, the goods had not been appropriated until they reached the destination in Kerala and that, therefore, the transfer of property in the goods took place only in Kerala. According to the learned counsel, the endorsements made on the railway receipts and the transfer of documents during the movements of the goods were only for the purpose of enabling the collection of the goods at Cochin and actually the transfer of property took place only in the State of Kerala. If this contention were to be accepted, then it would follow that there was a local sale in Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasioned by the sale itself and it was, therefore, taxable under section 3(a) of the Central Act. Though that decision was rendered with reference to the applicability of section 3(a) there is a passage which throws light regarding the ascertainment and appropriation of the goods. This aspect had to be gone into in view of the contentions based on certain terms found in the contract between the parties. The contract opened with the words: "We have, subject to the terms and conditions hereinafter referred to, this day sold to M/s. Fort Gloster Industries Ltd., New Mill,....by your order and on your account, the following goods, which are jute." Then, as regards payment, the stipulation was: "90 per cent cash against documents and the rest on approval." Basing himself on these terms the contention of the assessee there was that the transfer of property took place only in Calcutta and not in Orissa when they were put on board. The Supreme Court observed at page 217 thus: "It is conceded by counsel for the appellants that this letter or other letters in identical terms form the basis of the contracts of sale. The first part of the contract clearly mentions that the goods hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressly accepted in the list appended." In the conditions or notes appended to the said letter, the conditions regarding the despatch of goods, insurance and the payments, which we have already referred to, are to be found. From a construction of the terms of this letter, it is clear that the intention was the property in the goods passed to the purchaser as soon as the endorsement was made. There is nothing to show that the intention was to effect a transfer of property in the goods only on actual delivery. Though it is true that it is possible to make an endorsement on the railway receipt without an intention to pass the property in the goods, for which certain decisions were cited before us, we consider that those decisions are not of any assistance in the present case because the contract between the parties is so clear that the goods were ascertained or ascertainable goods and that the property in them got transferred as soon as the endorsement was made. We do not, therefore, think it necessary to go into those decisions. For the reasons discussed above, we are satisfied that the present case falls within section 3(b) read with section 9(1), proviso, and that this State was j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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