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TMI Blog1990 (11) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,798.50 was submitted by the applicant, who claimed deduction of this entire amount on the plea of sales to registered dealers. The aforesaid revised gross turnover was arrived at after deducting the value of patan transactions to the tune of Rs. 68,78,053.73 as according to the dealer-applicant, in this case the goods were resold to the applicant in the course of cross-contracts and there being no question of delivery or transfer of property in the goods, the transactions were not actual sales. The aforesaid deducted amount covered patan transactions involving sales of goods worth Rs. 26,77,350 to Anglo-India Jute Mills Co. Ltd. of goods worth Rs. 21,07,365 to India Jute Co. Ltd. and goods valued Rs. 20,93,370.64 to Bharat Burlop Linkers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not commit any error in holding that the remaining transactions fructified into sales on account of the delivery of the goods to the ultimate endorsee and as such the transactions were exigible to sales tax. Mr. Roy, therefore, declined to interfere with the said impugned order. 5.. The applicant-dealer filed an application before the same Tribunal on July 10, 1981, requesting it to refer four points under section 21(1) of the Bengal Finance (Sales Tax) Act, 1941, to the honourable High Court, Calcutta, for its opinion. The said application was heard by a Division Bench of the Tribunal. Before the Division Bench the dealer claimed that the transactions in question were speculative or patan ones on the ground that the same did not fructif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case of the applicant in brief is that the transactions with Bharat Burlop Linkers as also those with India Jute Co. Ltd. and Anglo-India Jute Mills Co. Ltd. are of the same nature. These are patan or short-circuit transactions, where no delivery of goods is involved, and no sales have actually taken place in terms of the Sale of Goods Act or the Bengal Finance (Sales Tax) Act, 1941. These are in the nature of crosscontracts and/or forward contracts pataned or settled in the manner usually prevalent in the local gunny market, where, as a result, in the case of short-circuits, intermediaries are eliminated by payment of difference between the contract prices. Whatever may have been the form given to these transactions, the parties substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer of title. The goods were resold to its original seller, viz., the mill, either through invoices or pucca delivery orders. But in the case of Bharat Burlop Linkers there was actual delivery of goods, so these transactions were sales. Mr. D. Majumdar, learned State Representative, referred to the Trade Circular No. 3/63 dated April 24, 1963, which was issued in clarification of the earlier circular referred to above. This states that "if and when transfer of pucca delivery orders by endorsements were involved in a chain of transactions between different dealers, the transactions (be it called patan transaction or not) might be treated as transactions involving sale of goods between dealers". 11.. The main contention of the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the abovementioned decisions. This has been given by the Supreme Court in Bayyana Bhimayya Sukhdevi Rathi v. Government of Andhra Pradesh [1961] 12 STC 147 and State of Andhra Pradesh v. Kolla Sree Ramamurthy [1962] 13 STC 522, relied on by the respondents. 12.. It was held in these cases that a delivery order is a document of title to goods and the possessor of such document has the right not only to receive the goods but also to transfer it to another by endorsement of delivery. Mere transfer of pucca delivery orders does not amount to sale; it is only when the ultimate endorsee in the chain of transactions takes delivery of the goods that all the intermediate transactions fructify to sales and the ultimate delivery feeds back the tit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haji P.K. Moidoo Bros. v. State of Madras [1959] 10 STC 1 decided by the Full Bench of the Kerala High Court; Tata Engineering and Locomotive Co. Ltd. v. Assistant Commissioner of Commercial Taxes [1970] 26 STC 354 decided by the Supreme Court. 14. Mr. D. Majumdar, learned State Representative, however, contended that since the applicant had claimed a certain benefit it is his primary responsibility to prove its allowability. He further contended that as the terms of the contract of sale are within the special knowledge of the applicant, it is incumbent on him to place before the taxing authorities the relevant details, viz., that the pucca delivery orders were ultimately purchased by the mills and cancelled, which he has failed to do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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