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TMI Blog1995 (1) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... office of Anamika had sold Badal fans to the assessee at Madras. But in the order of the assessing officer with regard to the sale turnover amounting to Rs. 5,36,667, the order runs as under: "Similarly Badal fans are manufactured at Calcutta and are sent in the name of Domestic Fan Engineering (P) Ltd., in the guise of stock transfer. The goods are intended for Associated Marketing Agencies, who are the wholesale distributors of the fans. But the goods are shown as having been sold to Anamika who are said to be their sole selling agents. The assessees place indents on the Madras office of Anamika, a copy of the indent to the head office at Calcutta. Against these indents, the goods were moved from Calcutta in the name of Domestic Fan Engineering (P) Ltd. Verification of records reveals that these goods were moved from outside the State in pursuance of the contract and as such the purchases of the assessees are to be assessed at 9 per cent single point." The value of goods sold as per the invoices raised by Anamika, to the assessee, is stated to be Rs. 5,36,667. Along with that, 10 per cent gross profit is added and the estimated sale turnover comes to Rs. 5,90,334, on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said that the assessee purchased the goods directly from the Calcutta head office. There is also no evidence on the side of the department to show that the assessee raised invoices for purchasing the goods from the Calcutta head office and the Calcutta head office, instead of sending the goods directly to the assessee, sent the goods to their branch office at Madras in the name of the assessee. It was further submitted by him that in the orders passed by the assessing officer, the Appellate Assistant Commissioner and the Tribunal, there was no mention as to what are the numbers of fans said to have been delivered by the Calcutta head office directly to the assessee. In the assessment order, there is no particulars as to how the figure of Rs. 5,36,667 was arrived at. The final figure of Rs. 5,90,334 was arrived at by the assessing officer by adding 10 per cent gross profit to Rs. 5,36,667. The basis for arriving at such a figure is also not mentioned in the order passed by the assessing officer. The learned counsel appearing for the assessee also produced the bills relating to Domestic Fan Engineering (P) Ltd. and the bills relating to M/s. Anamika. In the bills relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adras. According to the assessee, it purchased Badal fans from branch office of Anamika at Madras. M/s. Anamika purchased the said fans from the Domestic Fan Engineering (P) Ltd., at Madras. It was further submitted that the bills issued by the Domestic Fan Engineering (P) Ltd., would go to show that tax on the sale turnover of Badal fans was collected at 9 per cent. Therefore, according to the assessee, inasmuch as the Domestic Fan Engineering (P) Ltd., had already paid the tax on the sale turnover of Badal fans, it is not necessary for the assessee to pay the tax once again. But according to the department, the assessee has purchased the fans directly from the Domestic Fan Engineering at Calcutta. Therefore, it is an inter-State sale and the sale of fans by the assessee would be the first sale, liable to be taxed under the Tamil Nadu General Sales Tax Act. In order to support this contention, the Tribunal relied upon several letters between Anamika at Calcutta and the assessee for accepting the case put forward by the department. Letter dated April 1, 1981 is sent by Anamika at Calcutta to the assessee. According to the said letter, Anamika at Calcutta, despatched 450 fans as des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decision of this Court in Indian Duplicators Ltd. v. State of Tamil Nadu [1984] 57 STC 263. According to the facts arising in that case, the assessee, a manufacturer and dealer in duplicators, its accessories and duplicating equipments, etc., in Madras with branches outside, despatched goods to its Hyderabad and the branch office supplied the goods to local buyer against orders placed by the buyers with the branch office at Hyderabad. There was no contract for supply of goods by the Madras office to the Andhra Pradesh buyer. The bills were raised and collected in the name of the branch office at Hyderabad and sales tax was also paid according to the rates prevailing in Andhra Pradesh. But the goods had the mark of the Andhra Pradesh buyer's name on them. The assessee claimed exclusion of such turnover on the ground that it represented stock transfer from Madras to the Hyderabad branch. On these facts, this Court has held: "........though there was a movement of goods from Madras to Hyderabad, such movement was of goods manufactured in the ordinary or general course of business of the assessee and for being sold as and when the manufacturers received orders for purchase at its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. Ltd. v. Assistant Commissioner of Commercial Taxes [1970] 26 STC 354 at 381, the Supreme Court observed as under: "Another serious infirmity in the order of the Assistant Commissioner was (a matter which even the Advocate-General quite fairly had to concede) that instead of looking into each transaction in order to find out whether a completed contract of sale had taken place which could be brought to tax only if the movement of vehicles from Jamshedpur had been occasioned under a covenant or incident of that contract the Assistant Commissioner based his order on mere generalities. It has been suggested that all the transactions were of similar nature and the appellant's representative had himself submitted that a specimen transaction alone need be examined. In our judgment this was a wholly wrong procedure to follow and the Assistant Commissioner, on whom the duty lay of assessing the tax in accordance with law, was bound to examine each individual transaction and then decide whether it constituted an inter-State sale exigible to tax under the provisions of the Act." 9.. A perusal of the abovesaid decisions would go to show that unless the link is established that goods d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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