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TMI Blog1991 (9) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... rass oil. It had taken forest contracts with the Forest Department in Tamil Nadu during the years 1974-75 to 1977-78 and had extracted lemon-grass which was later on converted into lemon-grass oil. On an inspection of the business premises of the assessee on February 9, 1978, certain incriminating documents were recovered. The documents were verified with the records and it was found that the assessee had manufactured lemon-grass oil and transported the stocks to Kothamangalam in Kerala State through rail. The assessing authority was, thus, of the opinion that the sale of lemon grass oil had been made as a result of contract for supply of the same to dealers in Kerala State in the course of inter-State trade or commerce and accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate sales since they were made in the course of interState trade or commerce. The sales were thus held to be exigible to tax under the Act. 5.. The appeal filed by the assessee/respondent before the Tamil Nadu Sales Tax Appellate Tribunal for all the four years succeeded and it was held that there was no material on the record to justify the conclusion that the transactions in the case were inter-State sales and that the finding that the movement of the goods had taken place as a result of a covenant or incidence of contract of sale was based on surmises and conjectures. The Tribunal, therefore, allowed the appeals and set aside the order of the assessing authority as well as the Appellate Assistant Commissioner. The Tribunal held that si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase took place by transfer of documents of title during the movement of the goods from one State to another. In either of the two cases, if the answer is in the affirmative, the transaction would be deemed to be a sale in the course of inter-State trade or commerce. A sale would be deemed to have occasioned the movement of the goods from one State to another within the meaning of clause (a) of section 3 of the Act when the movement of those goods is the result of a covenant or incidence of the contract of sale, even though the property in the goods passes in either State. The movement of goods in such cases must be the result of a covenant or incidence of a contract of sale and there must be an obligation to export it, irrespective of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as exigible to tax in the State of Kerala, at the point of last purchase. The assessee had also filed not only its own affidavit before the Tribunal detailing all these facts but also the affidavits of the purchasers of the oil in the State of Kerala. A perusal of all these affidavits goes to show that the goods in question were brought to Kothamangalam in Kerala by the assessee and after ascertaining the local market conditions, were sold to different persons in retail against cash payments. None of the sales was effected by endorsing the railway receipt in the name of the purchaser and a contrary observation to that effect by the Appellate Assistant Commissioner is, undoubtedly, not correct. The railway receipts, which are available on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner were influenced by the fact that the sales in Kerala had been mostly made in favour of K.E. Mathai Sons and K.P. Kurian and, therefore, they presumed that the movement of the goods had taken place as a result of a prior contract. There is no material on the records to support this view of the Appellate Assistant Commissioner or the assessing authority. 7.. In view of what we have noticed above, we are of the opinion that the findings of fact recorded by the Tribunal to the effect that the sales in question were not inter-State sales and that the movement of the goods had not taken place as a result of any covenant or incidence of a prior contract of sale between the assessee and the buyers in Kerala State and also that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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