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TMI Blog1992 (9) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... ees and found by the Tribunal, section 6(2) of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Central Act") would apply to the turnover in question, or, as contended by the Revenue, the said turnover would only be an intra-State sale, coming under the State Act. If section 6(2) of the Central Act applies, the turnover is completely exempt from tax. If the State Act applies, since the goods sold are generators, they are taxable at the rate of 9 per cent, i.e., single point levy at the point of first sale. 3.. It is well-known that there are two types of inter-State sales which are charged to tax under the Central Act, one, coming under section 3(a) of the Central Act, namely, sale occasioning movement of goods from one State to another, and, the other, coming under section 3(b) of the Central Act, i.e., sale effected by transfer of documents of title to goods during their movement from one State to another. However, section 6(2) of the Central Act grants, subject to certain qualifications and fulfilment of certain formalities, exemption to an inter-State sale of goods coming under section 3(b), if it is subsequent to an earlier inter-State sale of section 3(a) ty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,400. In the other appeal regarding surcharge, necessary modification was allowed to be made. Hence the abovesaid tax cases have been filed by the Revenue. 9.. Before adverting to the submissions of the counsel on either side, we may point out the facts as found by the Tribunal: The assessees sold generators to its various customers in this State. The intending purchasers placed orders for the said generators with the assessees. The assessees, on receiving the purchase orders, placed orders with the outside-State sellers, mostly from Delhi. Those outside-State sellers executed the orders placed by the assessees, despatched the goods through lorries of South Eastern Roadways, who were having their transport offices at the place of those outside-State sellers and also at Coimbatore in Tamil Nadu. On despatch of the consignments, those sellers outside the State, advised the assessees through postal communication, about the transport way-bill number, freight payable, insurance charges, etc. On receiving necessary particulars of the movement of the goods after despatch, the assessees informed its purchasers. Then the said purchasers paid the necessary transport charges from the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above. 12.. Regarding the first of the abovesaid requirements, her submission is that in the present case there is no evidence at all as to when actually such second or subsequent sale has taken place. Substantiating the said submission, she also relied on Tata Iron and Steel Co. Limited v. S.R. Sarkar [1960] 11 STC 655 (SC) at 679. She also points out that admittedly as per lorry receipts pursuant to the sales in favour of the assessees, the destination of the goods in their movements from Delhi and other places outside Tamil Nadu is only Coimbatore and not the other places in Tamil Nadu to which the goods were subsequently sent by the assessees and that, pursuant to the respective subsequent sales, admittedly, there are no transfers of those lorry receipts, in favour of the abovesaid purchasers of the assessees. It has also been so found in the abovesaid revised assessment order. She also points out that though there are no physical deliveries to the assessees at Coimbatore, there are notional deliveries at Coimbatore to the assessees and that thereafter only the assessees make certain arrangements for the goods being delivered physically to their purchasers at different plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessees to effect those subsequent inter-State sales by transfer of documents of title to goods. In this connection, he relied on Deputy Commissioner of Commercial Taxes v. A.R.S. Thirumeninatha Nadar Firm [1968] 21 STC 184 (Mad.) and Bayyana Bhimayya Sukhdevi Rathi v. Government of Andhra Pradesh [1961] 12 STC 147 (SC). He also submits that the facts in Lucas Electrical Tractor Service Limited v. State of Tamil Nadu [1984] 55 STC 286 (Mad.) are similar and the decision given therein, granting exemption under section 6(2), should be followed in the present case also. 16.. We have considered the rival submissions. We will first take up the second submission made by the learned Additional Government Pleader (Taxes). In her second submission she points out that one requirement for availing section 6(2) exemption, is that the abovesaid second or subsequent inter-State sales must have been effected by transfer of documents of title to goods. From section 6(2), it is clear that this is one of the several requirements provided under section 6(2). In other words, if the said subsequent inter-State sales are effected by any other mode other than by transfer of document of title to goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Act which says: "Every registered dealer or person who moves goods in pursuance of a sale or purchase or otherwise from one place to another shall send along with the goods moved a bill of sale or delivery note or such other documents as may be prescribed." (Emphasis supplied) 18.. Further, as per the said form XX, only certain particulars regarding the consignor and consignee and the goods consigned have to be given therein and the consignor or consignee has to certify that the particulars given therein are true. The said form does not at all contain any order as such by the vendor for delivery of goods to the vendee. Form No. XX has been prescribed under rules 35(5) and 36(1) of the Tamil Nadu General Sales Tax Rules, as one of the documents to accompany the goods transported in a vehicle or boat and the direction contained in the said form to give the original copy to the officer-in-charge of the first check-post or barrier and the second copy to the officer-in-charge of the last check-post and retain the third copy by the person-in-charge of the goods vehicle or boat, would go to show that it was meant only to keep track of the movement of the goods to prevent evas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructions given by the assessees to the abovesaid carrier to deliver the goods, stating that the carrier need not deliver the goods at Coimbatore but has to deliver the respective goods to the respective purchasers at different places in Tamil Nadu and collect the delivery charges from them on delivery of the goods. However, even though these letters may look like delivery orders, they cannot be considered as documents of title to goods, coming within the abovesaid definition under section 2(4), because, even a delivery order which has been specifically mentioned in that definition, must satisfy the requirments mentioned in the latter part of the said definition, namely, used in the ordinary course of business, as proof of possession or control of goods, or authorising its possessor to transfer or receive goods thereby represented. It has also been so held in Ramdas Vittaldas v. Amarchand Co. AIR 1916 PC 7 and AIR 1949 Nag 186 (Abdul Shakur Ali Mohamad v. Motiram Premji Bhate) by Hidayathullah, J. as he then was. But in the present case it is not proved that the requirements mentioned in the abovesaid latter part of the definition under section 2(4) of the Sale of Goods Act, have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The submission by the Revenue, is that there is no evidence in the present case as to at what point of time such a second or subsequent sale by the assessees took place. On the other hand learned counsel for the assessees, relying on the abovesaid explanation 1 to section 3(b) argues that before the actual physical delivery to the said purchasers of the assessees, the relevant second or subsequent inter-State sales have taken place and that hence the sales have been effected during the said movement of goods. 24.. But, as already stated, the destination point, as per the original lorry receipts pursuant to the sales in favour of the assessees, was only Coimbatore and as per those lorry receipts, carrier is asked to deliver the goods only at Coimbatore and there was no obligation on its part to take the goods, further to any places beyond Coimbatore. While so, if the consignee, under those lorry receipts, namely, the assessees, chose not to take physical delivery of the goods at Coimbatore either by themselves or through their purchasers, but enter into a fresh contract of carriage with the carrier for further transportation of goods from Coimbatore to certain other places of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding of the goods in Delhi.......The expanded concept of the movement of goods added by explanation 1 to section 3(b) of the Central Sales Tax Act, on our interpretation, does not pose any difficulty, as we have already held that explanation 1 to section 3(b) does not permit a purchaser from the dealer to 'expand the movement' of goods beyond the time of the physical landing of the goods in the Union Territory of Delhi." Therefore, the abovesaid movement of goods came to an end at Coimbatore at the time when the said notional deliveries were effected there and so the subsequent sales by the assessees are only after the termination of such movement. Therefore also, section 6(2) exemption cannot be granted. Regarding this point also the Tribunal has not approached the questions correctly and erred in law. 25.. In the decision reported in Lucas Electrical Tractor Service Limited v. State of Tamil Nadu [1984] 55 STC 286 (Mad.) the facts are distinguishable from the present facts and so exemption cannot be granted in the present case. In that case there were three items of turnover and with reference to the first one, the exemption under section 6 (2) of the Central Act was claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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