9911796707
TMI Blog2005 (1) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... e I.T.I. for development and supply of 50 line card testers, the petitioner submitted tender dated April 27, 1991. Being the lowest, the petitioner's tender was accepted by the I.T.I. Thereafter, order No. 1900482-2/ 1394 dated February 27, 1992 was issued for purchase of five sets line card testers (semi-automatic tester Model 015) development model at the rate of Rs. 2,40,000 per set along with one set production model at a cost of Rs. 1,35,000. A sum equivalent to 10 per cent of the total cost was also remitted to the petitioner who, in turn, furnished bank guarantee of Rs. 1,33,500 in terms of clause 2(a)(l) of the purchase order. The petitioner supplied five line card testers of Rs. 2,40,000 each on March 31, 1993 for a total cost of Rs. 12 lakhs. The goods were sent by road after workability test was conducted by the officers of the I.T.I. in the factory premises of the petitioner at Gurgaon on March 30, 1993. The test report was signed by the representatives of the petitioner and the I.T.I. However, the price of the goods was not paid to the petitioner who then filed a suit in the court of Sub-Judge, 1st Class, Delhi for restraining State Bank of Bikaner and Jaipur from rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecording the following observations: "The brief facts of the case are that the dealer made sale of line card testers to M/s. Indian Telephone Industries Ltd., Makanpur (U.P.) for Rs. 12,00,000 vide BNO 51/93 dated March 31, 1993 against one purchase order. Upon checking of quality, the buyer rejected the goods. As per the purchase order of M/s. Indian Telephone Industries Ltd., the goods were to be inspected for quality control before acceptance. In the instant case all the goods were rejected and as such were not accepted. As the property/goods did not change hand or were not accepted the sale was not completed. Accordingly the dealer had shown this rejection of goods in the next quarterly return. The case was examined at length. The dealer had submitted written arguments on January 12, 1998 and reliance was made on the judgments cited as [1963] 14 STC 406 (SC) in the case of Bhopal Sugar Industries Ltd. v. D.P. Dube, Sales Tax Officer and [1958] 9 STC 353 (SC) [State of Madras v. Gannon Dunkerly Co. (Madras) Ltd.] in which it has been held that where the title of the goods does not pass, it is merely an agreement to sell and not a complete sale. As such the goods rejection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale. The goods are still in possession of the purchaser. So the property in goods passes to the purchaser and the sale is complete. Therefore, the rejection allowed by the Assessing Authority is not in order and the order of the Assessing Authority is revised as under: Gross turnover (ISS) ... 12,00,000 Taxable turnover at 10% ... 12,00,000 1,20,000 Surcharge ... 12,000 Total due ... 1,32,000." 6. The appeal filed by the petitioner against the aforementioned order was dismissed by the Tribunal vide its order dated May 17, 2000 (annexure P7). The Tribunal rejected the petitioner's plea that the property cannot be treated to have passed to the purchaser without acceptance by the latter of the goods as fault-free. The relevant extract of the Tribunal's order is reproduced below: "The plain reading of the contract would indicate that first set was to be supplied as a production model and the other four were to be supplied as the approved goods. They were not found fault-free at the purchaser's end but he only wanted these to be adjusted. The terms of the payment also indicate various stages. The part of payment had to be made before the delivery. The goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct appreciation of material placed on record and the same does not call for interference under article 226 of the Constitution of India. He emphasised that all the elements necessary for constituting a sale were fulfilled in the case of the petitioner, inasmuch as, after accepting the tender submitted by it, the I.T.I. had issued purchase order dated February 27, 1992: had advanced money for supply of line card testers: the goods were despatched by the petitioner and received by the purchaser: the purchaser did not reject the goods in the first instance but pointed out that the performance of the testers was not satisfactory and the same required to undergo an adjustment: the goods were not returned by the I.T.I. authorities to the petitioner within a period of 6 months as required by rule 24 of the Haryana General Sales Tax Rules, 1975 (for short, "the Rules") and the petitioner had initiated legal proceedings for realisation of price of the goods and damages. Shri Jaswant Singh referred to the averments contained in paragraphs 11 to 17 of affidavit dated June 28, 1996 filed by Shri Sarvesh Sharma on behalf of the petitioner in Allahabad High Court to show that the petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g purposes for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (v) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply to a person to whom such transfer, delivery or supply is made but does not include a mortgage, hypothecation, charge or pledge. Note 1: Sub-clauses (i) and (v) shall be deemed to have come into force on the second day of February, 1983. Note 2: Sub-clauses (ii) and (iv) so far as it relates to the goods, namely, shuttering material (used in construction of buildings), tents, kanats, chholdari, crockery, utensils, furniture and all other goods dealt with by the tent dealers as also other allied dealers for decoration and lightning purposes, electricity meters and water meters, shall come into force with effect from the 1st day o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following proposition: "According to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, which of course presupposes capacity to contract, that it must be supported by money consideration, and that as a result of the transaction property must actually pass in the goods. Unless all these elements are present, there can be no sale. Thus, if merely title to the goods passes but not as a result of any contract between the parties, express or implied, there is no sale. So also if the consideration, for the transfer was not money but other valuable consideration it may then be an exchange or barter but not a sale. And if under the contract of sale, title to the goods has not passed, then there is an agreement to sell and not a complete sale." 13.. In the present case, all the ingredients necessary for making the transaction involving supply of line card testers by the petitioner to the I.T.I. as sale were fulfilled. At the cost of repetition, we deem it proper to mention that line card testers were supplied by the petitioner to the I.T.I. in furthera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. That the applicant on March 31, 1993, supplied 5 Nos. line card testers each of the value of Rs. 2,40,000 for the total cost of Rs. 12 lakhs plus escalation due to Foreign Exchange rate variation plus sales tax by road after workability test conducted by the officers of the opposite party No. 1 in the factory premises of the applicant at Gurgaon from 30th March, 1993. 11.. That the opposite party No. 1 conducted test of 5 sets line card testers from March 30, 1993 who found O.K. in all respect and subsequently the test report was signed by the opposite party No. 1 as well as by the applicant. A photo copy of the said report dated April 3, 1993 is being filed herewith and marked as annexure No. 5 to this affidavit. 12.. That in accordance with the terms and conditions of the purchase order, the opposite party No. 1 agreed to release 60 per cent of the total cost of the first line card tester and 80 per cent of the price against deliveries of remaining 4 testers but the opposite party No. 1 failed to fulfil their contractual obligations enshrined in the agreement. For the sake of convenience, the applicant is reproducing relevant terms and conditions as under: "2. Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason for not accepting the petitioner's plea. The expression "taxable turnover" as defined in section 2(p) means that part of the dealer's gross turnover which remains after allowing deductions under section 27 of the 1973 Act. Section 27 specifies various deductions which are to be excluded from taxable turnover. Clause (a) of rule 24 of the Rules, which has been framed with reference to section 27 of the 1973 Act, lays down that in calculating the taxable turnover, the dealer may deduct from his gross turnover the amount allowed to a purchaser in respect of the goods returned by him to the dealer within a period of six months from the date of purchase of such goods provided that the account shows the dates on which the goods were purchased and returned and the amount for which refund was given or credit was allowed to the purchaser. In the present case, it is an undisputed position that line card testers supplied by the petitioner to the I.T.I. in furtherance of purchase order dated February 27, 1992 were not returned within six months. Initially, the I.T.I. authorities wanted rectification of the equipments but, later on, they decided to cancel the supply order. This is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by respondent No. 2 was bad for want of particulars of illegality or impropriety. Therefore, in the writ petition, the petitioner cannot, for the first time, take this plea. Moreover, by having refrained from raising any objection to the jurisdiction of respondent No. 2 to initiate proceedings under section 40(1) of the 1973 Act, the petitioner will be deemed to have waived his right to challenge the same at a later stage. 18.. There is another reason for our disinclination to entertain the objection of the petitioner against notice dated November 12, 1998. Section 40 of the 1973 Act lays down that "the Commissioner may on his own motion call for the record of any case pending before or disposed of by any officer appointed under sub-section (1) of section 3 of the Act to assist him or any Assessing Authority or appellate authority other than the Tribunal for the purpose of satisfying himself as to the legality or propriety of any proceedings or of any order made therein and may pass such order in relation thereto, as he may think fit..............." In notice annexure P3 respondent No. 2 had clearly indicated his intention to exercise his power under section 40(1) for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
