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TMI Blog2012 (11) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tender-cum-auction sale and the petitioners in all these cases have agreed to abide by the terms and conditions unconditionally, there cannot be any manner of doubt that the case squarely falls within the mischief of section 3 of the TNVAT Act, 2006. Therefore, the demand for payment of value added tax under the TNVAT Act, 2006 is justified. There is no basis to justify the claim as inter-State sale. The said plea is specious and not as per law. The petitioners have not made out a case for the relief sought for both in law and on facts. W.P. dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are registered dealers under the Central Sales Tax Act. They participated in the auction conducted by the first respondent on December 22, 2010 for sale of sandalwood. The sale is by way of tendercum-auction. The petitioners have been declared successful in the auction and each one of them purchased certain quantity of sandalwood from the first respondent as mentioned earlier. The first respondent by letters even dated December 30, 2010 informed the petitioners to pay sales tax at 12.5 per cent on the sale value. Thus, the petitioner in W.P. No. 568 of 2011 was directed to pay ₹ 5,57,80,750; the petitioner in W.P. No. 569 of 2011 was directed to pay ₹ 44,09,875; and the petitioner in W.P. No. 570 of 2011 was directed to pay ₹ 12,59,000 towards sales tax. 5. The said portion of the impugned letter demanding sales tax at the rate of 12.5 per cent on the sale value is under challenge stating that it is not local sale, but it is an inter-State sale taxable under the provisions of the Central Sales Tax Act, 1956. 6. Before adverting to the said stand of the petitioners, it is relevant to refer to some of the provisions of the tender-cum-auction sale notification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed that the purchaser has taken delivery of the entire quantity of wood purchased on the 15th day and the wood is kept in bailment from that day with the District Forest Officer, Salem, as bailee. The bailor (purchaser) shall pay ground rent at the rate of ₹ 600 per day per tonne. The bailee will not be responsible for any shortage or deterioration of quality of the wood. The maximum period of bailment is 90 days, after which the sold wood shall become the property of the Government. (c) The purchaser should give at least seven days notice of his intention to take delivery to the District Forest Officer, Salem supported by bank remittance in token for payment. No delivery will be made on holidays. . . . 26. Transport of wood to be done under proper permit: The tenderer in whose name the sale is effected shall transport the material under the cover of a transit permit to be issued by the competent authority of Forest Department to the destination approved by the concerned District Forest Officer in terms of timber transit and other relevant Rules in force. 27. Deemed acceptance of terms and conditions: The fact of submitting a tender is deemed to be unreserved accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion consequent to the auction was also paid in the State of Tamil Nadu as per clause 21 of the tender-cum-auction sale notification. Therefore, the entire sale transaction as per the records took place in the State of Tamil Nadu. In effect, the goods were sold and delivered within the State of Tamil Nadu. The terms of the tender-cumauction sale notification covers all the registered sandalwood contractors of Salem Division. There is no differentiation as local buyer or inter-State buyer. 8. So far as tax is concerned, clause 28(a) of the tender-cum-auction sale notification provides for payment of VAT and other taxes and clause 28(b) of the tender-cum-auction sale notification provides for payment of income-tax. The rate of value added tax at 12.5 per cent is also specified in clause 28(a) of the tender-cum-auction sale notification. Clause 27 of the tender-cum-auction sale notification specifically provides for deemed acceptance of the terms and conditions of the tender-cum-auction sale notification. Moreover, the tenderer/bidder certifies at the bottom of the tender application that they will abide by all the terms and conditions of the tender-cum-auction sale notification. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any goods for cash, deferred payment or other valuable consideration." Therefore, the sale in the present case either to a dealer or to a casual trader or agent is liable to be taxed as there is no dispute of sale within the State of Tamil Nadu. The petitioners in all these cases have bound themselves by the terms and conditions contained in the tender-cum-auction sale notification and the provisions of the TNVAT Act, 2006, for payment of tax on sale of goods within the State of Tamil Nadu. Therefore, they cannot resile from their contract nor does the law provide for payment of lesser tax, as the sale in the present case attracts the provisions of the TNVAT Act, 2006 as set out above. 12. Merely because there is movement of goods from the State of Tamil Nadu to another State at the instance of the buyer, that would not take it out of the purview of the term sale within the State. There are certain rules which provide for transportation of goods in question after the sale. But that does not change the character of the sale within the State consequent to tender-cum-auction sale. The benefit which the petitioners may get out of the provisions of the Income-tax Act is totally a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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