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TMI Blog1979 (5) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... to be sales effected by the dealer, that they were shown as such in the dealer's accounts and that there was no written agreement between the Union Carbide (India) Ltd. and the dealer. It was contended on behalf of the dealer that it acted only as a guarantor for payment of goods sold by the Union Carbide (India) Ltd. and in support thereof produced a letter of the Union Carbide (India) Ltd. The Commercial Tax Officer rejected such contention as he found that the payments were first made by the dealer for the goods and that, before effecting despatches to parties outside the State, the prior approval of the dealer was obtained by the Union Carbide (India) Ltd. Accordingly, he held that the dealer was not a mere guarantor. The Commercial Tax Officer came to the conclusion that the transactions represented inter-State sales within the meaning of section 3(b) of the Central Sales Tax Act, 1956, and as such exigible to sales tax. Being aggrieved, the dealer preferred an appeal against the said order under section 9 of the said Act, read with section 20(1) of the Bengal Finance (Sales Tax) Act, 1941. In the appeal, it was contended on behalf of the dealer before the Assistant Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 9(3) of the Central Sales Tax Act, 1956, read with section 20(3) of the Bengal Finance (Sales Tax) Act, 1941, against the order of the Assistant Commissioner of Commercial Taxes. In the revision, the Additional Commissioner of Commercial Taxes noted further facts ascertained on further enquiry as follows: (a) the orders in respect of the disputed transactions were secured by the salesmen of the Union Carbide (India) Ltd. as well as by the dealer; (b) in the railway receipts, the Union Carbide (India) Ltd. was shown as both the consignor and the consignee and such receipts were never endorsed in favour of the outside customers nor were sent to such customers direct; (c) the dealer made payments against such railway receipts, which were endorsed by the Union Carbide (India) Ltd. in their favour. On consideration of the entire facts, the Additional Commissioner saw no reason to differ from the decision of the Assistant Commissioner of Commercial Taxes and accordingly rejected the revision petition of the dealer. The dealer applied for a final revision before the Board of Revenue, West Bengal, under section 9(3) of the Central Sales Tax Act, 1956, read with secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealer, has contended before us that, in the facts and circumstances as found by the authorities below, which were not in dispute, it could not be held that there was any sale by the dealer to the customers outside the State. He submitted that before there could be any sale, there must be an agreement for sale and none of the authorities below have found that there was such an agreement between the dealer and the customers outside the State. There was no evidence on record to establish any such agreement for sale. He submitted further that it was the common case that the transactions originated from the Union Carbide (India) Ltd., parties whereto were only the Union Carbide (India) Ltd. and the customers outside the State. The goods were despatched by the Union Carbide (India) Ltd. to such customers and the invoices were issued by the Union Carbide (India) Ltd. to such customers. Thereafter, the dealer came into the picture as a guarantor and/or agent and assumed the responsibility of payment of the price of the goods. It is only after the dealer advanced the price to the Union Carbide (India) Ltd., it acquired the right to reimburse itself from the customers outside the State. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations were obiter, this court has consistently held that though the word 'sale' in its popular sense is not restricted to passing of title, and has a wider connotation as meaning the transaction of sale, and that in that sense an agreement to sell would, as one of the essential ingredients of sale, furnish sufficient nexus for a State to impose a tax, such levy could, nevertheless, be made only when the transaction is one of sale, and it would be a sale only when it has resulted in the passing of property in the goods to the purchaser.......... Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, which of course presupposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all these elements are present, there can be no sale. Thus, if merely title to the goods passes but not as a result of any contract between the parties, express or implied, there is no sale. So also if the consideration for the transfer was not mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive effect, Mr. Bhattacharya did not seriously contend that such relief was not available to the dealer. A revision of the assessment was pending before the Tribunal and the assessment could not be said to have become final when such claim was made on behalf of the assessee. Mr. Bhattacharya referred to section 3 of the Central Sales Tax Act, 1956, which reads as follows: "3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.-A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1.-Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b) be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2.-Where the movement of goods commences and terminates in the same State it shall not be deemed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not been found that there were agreements between the dealer and the customers outside the State for sale of the goods consigned by the Union Carbide (India) Ltd. It appears on the contrary that the orders were secured by either the dealer or the Union Carbide (India) Ltd. for sale of goods by the latter to the customers outside the State, after which the goods ordered were consigned by the Union Carbide (India) Ltd. and bills and/or invoices were drawn and issued by the Union Carbide (India) Ltd. for the goods despatched. All transactions were thus finalised and concluded. For collection of the price of such goods, the railway receipts were endorsed by the Union Carbide (India) Ltd. and, against such endorsements, the dealer acting as guarantor and/or a del credere agent advanced the price of the goods to the Union Carbide (India) Ltd. The dealer in turn further endorsed the railway receipts and made over the same to the bank forwarding the bill of the Union Carbide (India) Ltd. along with its own bill to the customers concerned, who retired the receipts from the bank on payment. The dealer thus obtained the reimbursement of the amounts advanced by it. From such facts it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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