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TMI Blog2014 (5) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... that for a transaction, to be an inter-State sale, there must be a movement of goods occasioned by the said sale from one State to another - No matter in which State the property in the goods passes, the movement of goods occasioned by the sale from one State to another would make a sale as one in the nature of inter-State sale - It is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement and it is also not necessary for a sale to be deemed to have taken place in the course of inter-State trade or commerce, that the covenant regarding inter-State must be specified in the contract itself - The decision was applied in Union of India Vs. Khosla & Co. Ltd. [1979 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt was made by Chitra Venkataraman,J.) The assessee is on appeal as against the order of the Tribunal relating to the assessment year 1989-90, raising the following substantial questions of law: 1. Whether in facts and circumstances of the case and in law, the Tribunal ought to have held that the transaction represents inter state sales only and not local sales since the contract provided for movement of goods from Tamil Nadu to the work site of the buyer at Warora? 2. Whether in facts and circumstances of the case and in law, the Tribunal was justified in confirming the tax liability on the turnover of ₹ 2,37,646/- since the assessing authority had not given any reasons for imposing the tax liability on the aforesaid turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision before this Court. 4. Learned counsel appearing for the assessee pointed out that even though there was no written agreement between the parties as to the terms of sale, yet, the invoice and the conduct of the parties reveal that the sale was an inter-State sale and the movement and the sale were intimately linked to each other, that the same could not be separated for the purpose of treating the sale as a local sale. Admitting the fact that the buyers had insured the goods, the payment being an ex-godown price and the movement of goods by the buyer, learned counsel pointed out that these were matters of contract, which, in any event, cannot be a decisive factor on the character of the sale. Given the fact that the parties had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate sale could be considered is the factum of movement of goods pursuant to the contract of sale. 8. In the decision reported in [1974] 34 STC 535 (Commissioner of Commercial Taxes, Bihar Vs. Bhag Singh Milkha Singh), it was pointed out that the obligation to take goods outside the State may be either an express covenant or an implied one under the contract by a mutual understanding and it is not necessary that in all cases, there must be direct evidence showing certain obligations. The obligation could be inferred from circumstantial evidence also. In the decision reported in AIR 1975 SC 887 (Oil India Ltd. v. Superintendent of Taxes (AIR 1975 SC 887), the Apex Court pointed out that for a transaction, to be an inter-State sale, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venant in the contract of sale or is an incident of that contract. 9. In [1993] 90 STC 1 (Co-operative Sugars (Chittur) Ltd. Vs. State of Tamil Nadu), the Supreme Court observed that the movement of goods was an incident of sale or purchase; amounted to an inter-State sale or purchase and it is not necessary that the contract of sale has to expressly provide for the movement of goods; it was sufficient that the movement of goods is implicit in the sale. Thus, in the background of the settled position of law, if the sale effected by the assessee and the movement thereon are inextricably and intimately connected with each other, then the one and only inference that would flow from the same is that, it is an inter-State sale. Thus, the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Thimmappa and Son and another) has no relevance to the facts of the case herein. The issue raised in the said decision is a totally different issue. When we look at the facts herein, it is clear that the sale and the movement were intimately connected, that the movement of goods is a consequence of sale. In the background of the facts herein, we hold that the Tribunal and the other authorities had misdirected themselves in placing emphasis on the transport and insurance made by the purchaser as indicators of the sale being a local sale. With the movement and the sale inextricably connected, we have no hesitation in allowing the Tax Case, thereby setting aside the order of the Tribunal. No costs. - - TaxTMI - TMITax - CST, VAT & Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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