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TMI Blog1985 (8) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... katha within the State of Bihar out of khair billets and/or khair woods purchased by them. It is stated that the said goods are purchased for consumption in their factory at Izatnagar (U.P.). They are outside the State dealers. 4.. The petitioners in C.W.J.C. Nos. 1143 and 1194 of 1983 (R) similarly carry on their business of timber goods at their place of business at Rourkela in the State of Orissa. It is said that they are registered under the Orissa Sales Tax Act, as well as registered under the Central Sales Tax Act. They also claim to have no other place of business in the State of Bihar nor do they carry on any business in the said goods within the State of Bihar and similarly outside the State dealers. 5.. In all the four writ petitions system and course of business and purchase transaction are same or similar, viz., either by calling tender or by auction. It may be stated here that so far as C.W.J.C. No. 1411 of 1983 (R) is concerned, the sale is by inviting tenders. In C.W.J.C. No. 1463 of 1983 (R), it is partly by tender and partly by auction, whereas, in C.W.J.C. Nos. 1194 and 1143 of 1983 (R), the purchases have been made by auction sale. In C.W.J.C. Nos. 1411 and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... destination of the goods as required under clause G of rule 3. This permit, therefore, forms part of the agreement for sale. 6.. In C.W.J.C. Nos. 1411 and 1463 of 1983 (R), it has been stated that the petitioner-company is purchasing katha logs or billets for the last 45 years in the same and similar manner and moving the goods to the destination shown in the permit for manufacture of katha in their factory at Bareilly where the goods are appropriated by them. The forest department and/or the Corporation always realised Central sales tax because the sale occasioned the movement of goods from the State of Bihar to Uttar Pradesh as per contract or incident of contract for sale. Under the agreement, the petitioner cannot transfer either the delivery order or the railway receipts or the permits to any person and the terminus points of the movement of the goods will invariably be the destination, indicated in the permit itself. Illustrative railway receipts and permits have also been enclosed to show the course and close of transaction. 7.. In C. W. J. C. Nos. 1194 and 1143 of 1983 (R) on striking of the hammer in the auction to the highest bidder and on payment of price and sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure 6) written by the Chief Conservator of Forest to the Conservator of Forest to realise only Central sales tax from the petitioner. It mentions that this is according to the written advice rendered by the joint Commissioner, Commercial Taxes, Ranchi. 8.. The immediate cause of action in C.W.J.C. No. 1411 of 1983 (R) is refusal of respondent No. 2 to release the security deposit on the assumption that even though the petitioner is liable to pay Bihar sales tax, what have been realised from it is the Central sales tax. Therefore, the difference is liable to be adjusted out of security money in deposit with the seller. In writ petition, C.W.J.C. No. 1463 of 1983 (R), the cause of action being realisation of Bihar sales tax paid on protest and further threat and demand to realise State tax on every transaction of khair wood or billets treating the sale to have concluded within the State of Bihar irrespective of the goods immediate movement outside the State. In C.W.J.C. No. 1411 of 1983 (R), the petitioner seeks direction to release the security amount as well as issuance of a writ of mandamus directing the respondents to forbear from demanding the Bihar sales tax with respect to k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, none of the purchasers are entitled to transfer delivery order, railway receipts or any other document of title relating to the goods for sale. The goods can only be appropriated to purchasers' use at the destination point shown in the permit which is either in the State of Uttar Pradesh or the State of Orissa. Learned counsel submitted that this fact is borne out by the forest transport permit issued by the seller and no one is permitted to move the goods in violation of the requirement of the permit and if anybody does so, he is liable to criminal prosecution under clause 8 of the Rules. It has also been stated that the forest department is the authority who grants permits and, therefore, it is within their knowledge, that the goods are meant to move from the State of Bihar either to U.P. or to Orissa. The seller is further aware that the petitioners are outside the State dealers registered under the Central Sales Tax Act as well as under their State Sales Tax Act where they have their principal seat of business. In support of their submission, learned counsel for the parties relied upon large number of cases but mainly to the case of Union of India v. K.G. Khosla and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 STC 445 (SC); AIR 1975 SC 887 that there is no necessity that the covenant regarding inter-State movement shall be specified in the contract itself regarding the inter-State movement of goods, for being sale or purchase in course inter-State trade or commerce. In the case of Union of India v. K.G. Khosla and Co. [1979] 43 STC 457(SC); AIR 1979 SC 1160, Chandrachud, C.J., speaking for the court stated the law as hereunder: "It is not true to say that for the purposes of section 3(a) of the Act it is necessary that the contract of sale must itself provide for and cause the movement of goods or that the movement of goods must be occasioned specifically in accordance with the terms of the contract of sale............. It is only if a sale occasions the movement of goods from one State to another that it can be deemed to have taken place in the course of inter-State trade or commerce within the meaning of section 3(a) of the Act......... In order that a sale may be regarded as an inter-State sale, it is immaterial whether the property in the goods passes in one State or another. The question as regards the nature of the sale, that is, whether it is an inter-State sale or an int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 489 (SC); AIR 1976 SC 410 and Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC); AIR 1976 SC 1016, before a sale can be said to have taken place in the course of inter-State trade or commerce, but it do not fulfil the 3rd condition laid down in the aforesaid two cases, which required the "concluded sale" to take place in the State where the goods have moved, which must be different from the State from where the goods had moved. Learned Advocate-General submits that the sale in the State of Bihar was a concluded one, inasmuch as the goods were purchased and price thereof paid and delivery order was handed over to the purchaser in the State of Bihar. The purchaser moving the goods thereafter at his discretion to another State is irrelevant consideration in this regard. According to the AdvocateGeneral, it is not a case, therefore, the sale occasions the movement of the goods from one State to another. At the first impulse, I was of the opinion that there is an apparent conflict in the decisions cited by the learned counsel for the parties, as to the test laid down to determine sale in course of inter-State trade and commerce, inasmuch as the statement of law to the effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination State, indicated in the permit. This position obtained, both in the written agreement of sale and/or could be culled out from the permit issued by the seller. It mandates the purchaser to move the goods in vehicles registered with the seller, to be taken to the State of Orissa or to the State of Uttar Pradesh through a particular route. The seller keeps control and supervision over the goods purchased and its movement, even though the title to the goods passes in the State of Bihar till the goods moves out from the State and reaches the destination State. The factual delivery of the goods with right of disposal, therefore, occurs in the State of Uttar Pradesh and/or Orissa pursuant to the purchase made in the State of Bihar. In my opinion, the sale is concluded and/or the transaction of sale and purchase comes to an end in the State where the goods had moved. This has been the course of trade and business between the respondent-seller and the purchasers, obtaining more than a decade. The joint Commissioner, Commercial Taxes, Ranchi, had opined as far back as in the year 1982 that the transactions are covered under section 3(a) of the Act. In spite of that the revenue as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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