9911796707
TMI Blog2007 (8) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... iso of the CST Act are attracted but not section 6(2) of the CST Act, to the case on hand. Therefore, assessing authority and first appellate authority have rightly held that the Karnataka State is the appropriate State entitled under the provisions of the CST Act for recovery of the sales tax in respect of the goods sold to the KPTCL by the registered dealer. In view of the finding of fact recorded by the assessing authority which was concurred by the appellate authority and for the reasons stated supra by us and the reliance placed by the learned AGA on the decisions of the Supreme Court, Andhra Pradesh High Court, Gujarat High Court, Calcutta High Court and Madras High Court in the above cases, we answer the questions of law in favour of the Revenue and against the respondent. X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 15,78,33,563 and Rs. 2,45,68,947 under the KST Act and taxable turnover is shown as nil under the CST Act. The assessing authority concluded the assessment and levied the tax at four per cent in respect of the goods covered by "C" forms and tax at 10 per cent in respect of the goods not covered by "C" forms and determined the total turnover of Rs. 15,78,33,563 and a taxable turnover of Rs. 13,22,80,926 under the CST Act and it has also levied penalty upon the respondent under section 12B(4) of the KST Act. The respondent claimed that the supply of goods to the KPTCL was a transit sale covered under sections 3(b) and 6(2) of the CST Act in respect of the goods worth Rs. 13,22,80,926. The said claim has been rejected by the assessing authority holding that the same is interState sale availed by the respondent under section 3(a) of the CST Act. Aggrieved by the said order the respondent-company preferred the appeals before the first appellate authority. He has dismissed the appeals vide order dated August 31, 2004 confirming the order of the assessing authority. Aggrieved by the said order passed by the first appellate authority, the respondent-company prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the first appellate authority. Further it is contended that the impugned judgment of the KAT is not only vitiated on account of erroneous finding of fact but also suffers from error in law as the same is in contravention of the provisions of section 3(a) read with section 9(1) proviso of the CST Act and the law laid down by the apex court in various judgments, which will be referred to in the subsequent paragraphs of this judgment. The learned A.G.A., in support of her legal submissions placed strong reliance upon the lorry receipts issued by the Maruthi Road Carriers, Hyderabad, and further in justification of the concurrent finding of fact recorded by the first appellate authority in its order placed reliance upon the Constitution Bench decision of the Supreme Court in the case of Tata Iron and Steel Co. Limited, Bombay v. Sarkar (S.R.) [1960] 11 STC 655 wherein the apex court in the said case examined the provision of section 3(a) and (b) and section 4(2) of the CST Act and made an observation that where the property in the goods has passed before the movement has commenced, the sale will evidently not fall within clause (b) nor will the sale in which the property in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court held that such sale of goods falls within section 3(a) of the CST Act and there is no second sale. With reference to the aforesaid decisions of the Supreme Court, Division Bench decision of the Andhra Pradesh High Court and Madras High Court it is contended by the learned A. G. A., Smt. Sujatha, that the finding of fact recorded by the assessing authority, which is concurred with by first appellate authority in its order has been erroneously set aside by the KAT assigning reasons, which are perverse and therefore the same are vitiated on account of erroneous reasoning. Therefore, she has contended that the questions of law referred to supra would arise in this revision petition and requested to answer the same in favour of the Revenue. Sri Sarangan, learned Senior Counsel, appearing on behalf of the respondent placed strong reliance upon the following decisions in support of his contention: (1) State of Tamil Nadu v. Dharangadhara Trading Co. Ltd. [1988] 70 STC 92 (SC), (2) State of Gujarat v. Haridas Mulji Thakker [1992] 84 STC 317 (Guj) (paragraphs 6, 8 and 10), (3) State of West Bengal v. Joshi Jute Corporation [1996] 100 STC 17 (Cal) and (4) Tractors & Farm Equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no law is laid down by the apex court in the case of Tata Iron and Steel Co. Limited's case [1960] 11 STC 655 with regard to the sale of goods falling under section 3(a) of the CST Act. Therefore he submits that the reliance placed upon the said decision by the learned AGA does not substantiate the concurrent finding of fact recorded by the first appellate authority, hence he has contended that the Tribunal has rightly set aside the same by allowing the appeals of the respondent. After hearing the learned AGA and the learned Senior Counsel at length, we have carefully examined the rival legal contentions urged with reference to the order passed by the assessing authority, which order was concurred with by the first appellate authority and the impugned judgment wherein it has set aside the order of the appellate authority impugned in the appeals before the KAT to find out whether the questions of law as framed in this revision petition would arise for our consideration and is required to be answered in favour of the revision petitioner or not. After careful consideration of the rival legal submissions and material on record we have answered the questions of law framed togeth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or within such further time as that authority may, for sufficient cause, permit,-- (a) a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in a prescribed form obtained from the prescribed authority; and (1)Here italicised. (b) if the subsequent sale is made,-- (i) to a registered dealer, a declaration referred to in clause (a) of sub-section (4) of section 8; or (ii) to the Government, not being a registered dealer, a certificate referred to in clause (b) of sub-section (4) of section 8. 9.. Levy and collection of tax and penalties.--(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by the Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CST Act, has observed thus at page 666: "The sale contemplated by clause (b) is one which is effected by transfer of documents of title to the goods during their movement from one State to another. Where the property in the goods has passed before the movement has commenced, the sale will evidently not fall within clause (b); nor will the sale in which the property in the goods passes after the movement from one State to another has ceased to be covered by the clause. Accordingly a sale effected by transfer of documents of title after the commencement of movement and before its conclusion as defined by the two terminii set out in Explanation (1) and no other sale will be regarded as an inter-State sale under section 3(b). The definition of the expression 'sale' undoubtedly includes transfer of goods on hire-purchase or other systems of payment by instalments, but thereby, a mere contract of sale which does not result in transfer of property occasioning movement of goods from one State to another does not fall within the terms of section 3(a). That transaction alone in which there is 'transfer of goods' on the hire-purchase or other systems of payment by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness as proof of possession or control of goods, endorsement or delivery thereof according to mercantile practice will amount to delivery of goods thereby represented. The transfer of document either by endorsement or delivery does complete transfer of title, but in the absence of an indication to that effect in the statute, the place where the documents are transferred is not the place of sale. Further it was observed by the Supreme Court in the case of Bayyana Bhimayya's case [1961] 12 STC 147 upon which strong reliance was placed by the learned AGA with reference to the terms of the contract and section 2(4) of the Sale of Goods Act, at page 150, relevant portion of the unnumbered para reads thus: (1)Here italicised. ". . . A delivery order is a document of title to goods [vide section 2(4) of the Sale of Goods Act], and the possessor of such a document has the right not only to receive the goods but also to transfer it to another by endorsement or delivery. At the moment of delivery by the mills to the third parties, there were, in effect, two deliveries, one by the Mills to the appellants, represented, in so far as the Mills were concerned, by the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9] 74 STC 201 with reference to the proviso to section 9(1) of the CST Act. The relevant portion at page 206, unnumbered para 3, reads thus: "The court recognised that the construction it was placing upon the proviso would give rise to a lacuna in the proviso, and that in case of sale of goods which are exempt from tax in the State from which they emanate and consequently in respect of which sale no declaration in C form is obtained, the second sale, even though not exempted under section 6(2), would still be exempted; but, the court was of the opinion that in view of the actual language employed in the proviso to section 9(1), it had to conclude that the State of Madras cannot levy the tax. It was evidently to rectify this situation that the aforesaid words were inserted in clause (a) of the proviso to section 9(1) by Amendment Act 28 of 1969. In the 'Notes on Clauses' appended to the Bill, the following note was appended with respect to clause 6 (section 6 of the amending Act) which indeed substituted the entire section 9. [We may state in this connection that the proviso to section 9(1) was again substituted by the Amending Act 103 of 1976, which added clause (b) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
