9911796707
TMI Blog1996 (5) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was registered under the provisions of the Central Sales Tax Act. Those sales amounted to a sum of Rs. 24,44,994.07. In the assessment proceeding in this State the assessee claimed that the sales in question were made in course of inter-State trade and commerce and Central sales tax in respect of those sales had been duly deposited at Madras and Bombay respectively from where the movement of the goods had taken place and, hence, this amount was not liable to be taken into account in the assessment in this State. The assessing officer did not see eye to eye with the contention. According to the assessing officer, each of the transactions involved two incidents of sale; the first sale being inter-State in nature took place between the manufacturer and the assessee-company in terms of section 3(i)(a) of the Act and the second inter-State sale took place between the assessee and the purchaser-company as provided under section 3(i)(b) of the Central Sales Tax Act, 1956. The assessee was, therefore, liable to pay Central sales tax in respect of the second sale in Bihar. Against the assessment order passed by the assessing officer on June 4, 1979, the assessee preferred an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount after deducting its commission, etc., within 30 days of the sale. The assessee, the agent, was entitled to receive selling commission at the rate of 12 per cent of the net invoice value. The agreement specifically provided that notwithstanding anything to the contrary contained therein, the goods, while in the custody of the agent, would continue to be the property of the principal. It further provided that the agent would not be liable for any loss or damage which may occasion to any of the principal's goods in its custody unless the damage was caused due to its wilful negligence. While the goods were in transit or in the custody of the agent, the responsibility to provide them a cover of insurance, etc., also lay with the principal. 5.. Having, thus, examined the terms of the agency agreement between the assessee and its principal, the Tribunal also examined one typical transaction of sale and broke it down into smaller fractions. It is also an admitted position that the other sales forming part of the disputed turnover followed a similar pattern. The Tribunal has found that the purchaser-company (TELCO) by its letter, dated November 19/23, 1970, invited quotation fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchaser-company. The assessee's invoices showed the same prices as shown in the invoices raised by the principal in its name. In those invoices the assessee-company, as earlier advised by its principal, allowed 10 per cent discount to the purchaser but charged three per cent Central sales tax (subject to production of form C). Finally on receiving payments from the purchaser-company as per the invoices, the railway receipts were handed over to them on the basis of which the purchaser-company got the goods directly released from the railway. The assessee sent the price of the goods to its principal, the manufacturer, and deposited the amount of the Central sales tax at Madras. 7.. On the basis of these admitted facts and circumstances it was contended on behalf of the assessee that the movement of the goods from Madras was occasioned by their sale to the purchasercompany and, hence, the transaction was manifestly sale in the course of inter-State trade and commerce as defined under section 3(i)(a) of the Central Sales Tax Act. 8.. From the order of the Tribunal, it appears that though initially it was contended on behalf of the Revenue that the entire transaction actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mshedpur. It was clearly stated therein that the despatches were on consignment basis and the amounts in the invoices were to be paid to the principal as soon as their sales were effected. This clearly proves that their sales to the purchasers were still to be effected and they had been sent to M/s. Voltas Ltd., on consignment basis for their sales to the purchaser. M/s. Voltas Ltd., as agents were required in pursuance of the term of the endorsement to realise the sales tax as applicable and pay to the appropriate authority and that they (M/s. Voltas Ltd.) were to get their selling agent commission at the rate of 12 per cent by way of separate credit note. The property in the goods till that time was with the manufacturers and it passed on to the purchaser after he had taken delivery thereof on the strength of the railway receipts as issued to them by the manufacturers as consignees. Those sales by the Voltas to the Telco were on behalf of their principals, viz., the manufacturing companies for effecting which they (M/s. Voltas Ltd.) were to get their scheduled commission. In such circumstances, the sales of the goods so effected in Bihar were clearly in the nature of intra-Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and possession being in the hands of the agent. The inference, drawn is that the sales took place at Jamshedpur in Bihar, only after the goods had arrived there on the conclusion of their movement from Madras. To put it differently the movement of the goods from Madras was not occasioned by any sale as no sale preceded the movement of the goods. 14.. The controversy, thus, really boils down to an interpretation of the expression "if the sale or purchase occasion the movement of goods from one State to another" (as appearing in section 3(i)(a) of the Central Sales Tax Act). Can it be said that the movement of goods was occasioned by their sale even though the actual sale and the passing of goods had not preceded the movement of the goods but was to come about later on? The Tribunal has held in the negative. 15.. Having heard Mr. Sahay, counsel appearing on behalf of the assessee, and the counsel appearing on behalf of the State, I am of the opinion that the view taken by the Tribunal is not based on the correct legal position and appears to be at variance with the law laid down by the Supreme Court decisions on this point. 16.. In the case of Oil India Ltd. v. Superintendent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory and its branch. If there is a conceivable link between the movement of the goods and the buyer's contract, and if in the course of inter-State movement the goods move only to reach the buyer in satisfaction of his contract of purchase and such a nexus is otherwise inexplicable, then the sale or purchase of the specific or ascertained goods ought to be deemed to have taken place in the course of inter-State trade or commerce as such a sale or purchase occasioned the movement of the goods from one State to another. The presence of an intermediary such as the seller's own representative or branch office, who initiated the contract may not make the matter different. Such an interception by a known person on behalf of the seller in the delivery State and such person's activities prior to or after the implementation of the contract may not alter the position." 19.. In view of the aforesaid decisions of the Supreme Court the finding of the Tribunal that the transactions were in the nature of intra-State sale appears to me to be quite unsustainable in law and I have no doubt in my mind that the sales in question were made in course of inter-State trade and commerce within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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