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TMI Blog1982 (3) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the case of the department that the sale of confectionery goods by the assessee to the Canteen Stores Department (India), Bombay, occasioned the movement of the goods and were therefore inter-State sales, it is the case of the assessee that the sales are not inter-State sales, that the sales were effected in Madras and goods were delivered to the Madras Installation of the Canteen Stores Department and the despatch of goods was by the Madras Installation of the Canteen Stores Department. In the circumstances, the sales could not be characterised as inter-State sales. The assessee's contentions were not accepted by the Commercial Tax Officer, the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal. Hence these tax revision cases. We shall first take up the question whether the sales of confectionery goods effected by the assessee in favour of the Canteen Stores Department (India), Bombay, were inter-State sales or local sales. To answer this question, it is necessary to state a few facts. A specimen of the order placed by the Canteen Stores Department (India), Bombay, on the assessee is afforded by the order dated 25th November, 1974. By the said order, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also equally admitted that the confectionery goods are brought by road from the Nellikuppam factory of the assessee to the railway siding at Nellikuppam. It is equally admitted that under the military rules the Canteen Stores Department (India) are entitled to a concession in the matter of freight for the transport of goods from one place to another. Viewed in the backdrop of the above facts it will be clear that the sale of the confectionery goods took place within the State of Tamil Nadu. The sale or the contract of sale did not occasion the movement of the goods. As already pointed out, the very order placed by the Canteen Stores Department (India), Bombay, stipulated that the goods should be despatched by the assessee on behalf of the Canteen Stores Department (India), CRBID, Fort St. George, Madras, From this itself it is clear that the goods were to be delivered to the Canteen Stores Department (India), Madras, and the assessee was merely to act as the agent on behalf of the Canteen Stores Department (India), Madras, in despatching the goods from Madras to Bombay. Apart from the invoice being drawn on the Canteen Stores Department (India), CRBID, Fort St. George, Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the depot and that after such notice has been served the goods so rejected shall remain in the depot at the supplier's own risk and responsibility. This would show that the supplier's responsibility and risk come into play only after a notice of rejection is served on the supplier and that too within one week from the date of the delivery of the goods into the depot. We therefore hold that clause No. 6 does not in any way prevent the sale being completed within the territory of the State of Tamil Nadu itself as contended for by the assessee. The learned Additional Government Pleader cited the decision of the Supreme Court in Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445 (SC). There the Supreme Court was concerned with the question whether the sales made by the Oil India Limited pursuant to an agreement entered into with the Government of India through the agency of Indian Oil Corporation were sales in the course of inter-State trade and commerce and were therefore liable to sales tax under the Central Sales Tax Act. On the facts of that case and on an interpretation of the agreement, the learned judges held that the sales were sales in the course of inter-State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be in accordance with the specifications mentioned in the contract of sale, they were accepted. The Supreme Court held on these facts that even though the sale took place at Calcutta, since the movement of goods preceded the sale in pursuance of the contract of sale, which contained a clear stipulation that the goods were to move from Orissa to Calcutta, the movement of the goods was occasioned by the sale itself and it was therefore taxable under section 3(a) of the Central Act. It will be seen therefore that the facts of that case are entirely different. There, the movement of the goods was occasioned from certain railway siding in Orissa pursuant to the contract of sale. Fazal Ali, J., has given three illustrations at page 214 of the Reports. Case No. III runs thus: "B, a purchaser in State Y, comes to State X and purchases the goods and pays the price thereof. After having purchased the goods he then books the goods from State X to State Y in his own name. This is also a case where the sale is purely an internal sale having taken place in State X and the movement of goods is not occasioned by the sale but takes place after the property is purchased by B and becomes his prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who bought the cotton in the State and who were the last dealers not exempt from taxation under section 3(3). The Supreme Court held that the property in the cotton bales sold by the sellers did not pass during the movement of goods from one State to another by transfer of documents of title, and the movement of goods from the Madras State to places outside the State was not the result of any covenant or incident of the contract of sale. The movement of the cotton bales outside the State was by the buyers themselves after the property in them had passed to them, and therefore the sales were not in course of inter-State trade. The court further held that under rule 4-A(iv)(b) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, the tax had to be levied from the dealer who bought the goods in the State and who was the last dealer not exempt from taxation. Whether such dealer was a resident in the State or a non-resident was immaterial. The buyers who purchased the cotton bales from the sellers were the last dealers who bought the cotton bales in the State and the single point tax under section 5(2) had to be levied from them and not from the sellers. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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