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TMI Blog1999 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... The Delhi Administration invited tenders for the supply of 50 degree up (under proof) rum and in all the three years the present dealer s tender was accepted and it was granted L1-A licence. Agreements for all the years were executed between the President of India through the Commissioner of Excise, Delhi and M/s. Central Distillery Breweries Ltd., 20, Netaji Subhash Marg, Daryaganj, New Delhi. The terms of the agreements in all the three years are identical and, therefore, I would refer to the important terms, as contained in the agreement dated 27th of December, 1984, copy of which has been annexed to the T.T.R. No. 126 of 1999. The agreement was for the supply of the said rum for retail sale at the Government run country-liquor-cum-beer vends in the Union Territory of Delhi. The dealer has been described as a licensee and it has been stated that it has applied for the licence in form L1-A. Clause 8 of the agreement which provides that the Collector of Excise, Delhi will place fortnightly orders at the Delhi office for supply of 50 degree up rum specifying the date by which the particular quantities must be supplied and shall further give instructions from time to time, as to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bonded warehouse established by the Government, he shall pay the rent as may be fixed by the Collector and shall bear all expenses connected with its use as a bonded warehouse. Clause 18 requires that the licensee shall open the licensed premises for business only during such hours as the Commissioner may specify for L1-A license. 4.. The dispute is about the taxability of the rum supplied to the Delhi Administration under the agreements for the three years in question. The extent of the turnover on this account is Rs. 27,54,827, Rs. 40,84,500 and Rs. 15,97,067 in the three years, respectively. The dealer s contention was that the sales of beer to the Delhi Administration were made at Delhi from the dealer s depot and, therefore, these were sales effected within the territory of Delhi and were not inter-State sales. This contention of the dealer has not been accepted. The contention of the revenue has been that the dealer s manufacturing activity is at Meerut within the State of U.P. and admittedly the goods in question were taken to Delhi from the State of U.P. to be supplied to the Delhi Administration in pursuance of the agreements, referred to above, and, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised the bills and received the sale price. The contention of the dealer was that the sales were effected in the State where the branches were situated while the contention of the Revenue was that the sales were inter-State sales. The honourable Supreme Court held that the sales were inter-State sales as it were the orders placed by the purchaser that occasioned the movement of the goods. The principle of law as explained by the honourable Supreme Court is not open to any doubt or explanation. However, it is apparent that the Tribunal has not properly appreciated the facts of the present case while applying the ratio of the judgment of the honourable Supreme Court. In the case before the Supreme Court, the buyers had placed purchase orders on the dealer and it was in compliance of those orders that the goods were manufactured and despatched. In the present case, however, it has not been so established. The Tribunal has failed to appreciate the nature of the agreement executed between the Delhi Administration and the dealer-revisionist. The agreement, that has been referred to above, was not an agreement of purchase of any quantity of rum. The agreement was merely to grant a licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utta. The question was whether the sale of cement to the said Executive Engineer was inter-State sale or an intra-State sale effected at Calcutta. The honourable Supreme Court held that it was an intra-State sale. The honourable Supreme Court observed as under: In the present case, the goods are despatched by the respondent to themselves at Calcutta according to the directions of the State Trading Corporation. This was for consumption in Calcutta area as will appear from the authorisation dated November 4, 1961. The other authorisation letter dated November 22, 1961, was issued, after the arrival of the goods, by the Regional Cement Officer, Calcutta, authorising the respondent to sell cement. It is apparent that there was no movement of goods by the respondent-company as a result of a contract of sale between the respondent and the buyer at Calcutta. The shipment was made by the respondent-company without any reference to any buyer. The movement of goods from Madras to Calcutta did not take place as a result of any contract of sale, but in pursuance of instruction contained in authorisation for transfer of stocks from Madras to Calcutta. The transactions were not inter-State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the agreement, the movement of the goods to Delhi was not in pursuance of any transaction of sale but in pursuance of the licence under which the dealer was to maintain a warehouse with a minimum stock within the territory of Delhi. The agreement by itself did not bring about any sale or purchase and, therefore, the transport of goods from the distillery in U.P. to warehouse in Delhi could not be treated as a movement of goods occasioned by any sale or purchase. The sale, as stated above, took place only when any order was actually placed by the Collector of Central Excise, Delhi. As stated above, the assessing officer has not probed further into the matter to find out if there was no buffer stock at Delhi and the goods were transported from the distillery only on receipt of the orders. Therefore, there is no evidence to show that the supply of rum to the Delhi Administration in the three years resulted in any inter-State sales taxable in State of U.P. The findings of the authorities below are based on a misconception about the nature of the agreements dated 27th of December, 1984 which, as stated above, did not bring about any sale or purchase. The Tribunal s finding, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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