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TMI Blog2004 (11) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... me to Kerala and purchased sandalwood for transport to their respective States outside Kerala and so much so, their purchases of sandalwood in auction from the Forest Department are inter-State sales as contemplated under Section 3(a) of the CST Act liable to be taxed only at the rate of 4% against C-forms to be issued by them. 2. The Special Government Pleader Sri. Raju Joseph, appearing for the respondents, contended that tender conditions do not visualise any inter-State movement of goods and the transactions being auction-sales held in Kerala involving local delivery of goods against full payment are pure local sales under the KGST Act and the Forest Department rightly demanded sales tax under the KGST Act. 3. The question as to wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner in the connected OPs above referred vide Ext.P9 order produced in WPC 3153 of 2004, held that auction sales of sandalwood by the Forest Department to the petitioners are local sales under the K.G.S.T. Act, rightly treated so, and tax demanded by the Forest Department which order is under challenge in the said WPC. In fact, if the Buyer has a case that the seller has collected and remitted excess sales tax, it would be open to the Buyer to request the assessing officer before whom the seller is assessed to forefeit the excess collection under Section 46A(1) of the Act and on forfeiture the Buyer is free to make application in Form 40 prescribed under Rule 31D of the KGST Rules for refund of excess collection forfeited. However, in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport of goods outside Kerala, if any, made by the purchasers after purchase is a subsequent and independent transaction at their choice which would not make the auction sales inter-State sales and as far as seller, namely, the Forest Department, is concerned, sales are over when goods are delivered to the Buyers after receipt of full consideration along with local taxes in accordance with tender conditions. 5. Petitioners have relied on large number of decisions, particularly the decisions of the Supreme Court in STATE OF AP V. NTPC, (2002) 127 STC 280, CO-OPERATIVE SUGAR CHITTUR LTD. V. STATE OF TAMIL NADU, AIR 1994 SC 1456, BENGAL IMMUNITY'S CASE, (1955) 6 STC 446, AND OIL INDIA LTD. V. SUPERINTENDENT OF TAXES, (1975) 35 STC 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la to outside the State. The facts which are beyond controversy are as follows: (1) Sale is held in auction and apart from conditions of auction-sale provided in the tender conditions, there is no express or implied agreement separately between the Forest Department and petitioners for transport of goods outside State;(2) Under the tender conditions (a) sale will be confirmed to the highest bidder in auction; (b) Sandalwood will be delivered to the Buyer after full payment, along with taxes and other duties, is received by the Forest Department; (c) the goods will be delivered by the Forest Department to the Buyers at Marayur in Kerala after payment is received; (d) the Buyers have to take delivery and transport the goods wherever they want ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be expressly provided in the contract of sale to constitute an inter-State sale under Section 3(a) of the CST Act, there has to be a connection between the sale and movement outside the State, however remote it may be, and in the absence of such a link between the two events, such sales cannot be said to occasion movement of goods outside the State. None of the decisions referred to by the petitioners pertains to auction-sales, terms and conditions of which are uniform for all purchasers and therefore distinct from normal contract of sale between parties. In the decisions referred to above also the Supreme Court has held that eventhough there need not be express provision in the contract for movement of goods outside, movement of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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