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TMI Blog2016 (6) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... e are very much applicable to the facts and circumstances of the present case and accordingly we are not refrained from observing that the transaction in the present case is inter-State sale. - Decided in favor of assessee. - STREV No. 60 of 2011 - - - Dated:- 22-9-2015 - I. Mahanty and D.P.Choudhury, JJ. For Petitioner : M/s. S. Kanungo, Ch. S. Mishra, R.N.Patnaik, N.R.Mohanty, N.K. Nanda and Ch. H. Satpathy. For Opposite Party : Mr. R.P. Kar, Senior Standing Counsel for the Revenue. JUDGMENT The captioned revision has been preferred under section 24(1) of the Odisha Sales Act, 1947 (for short the Act ) against the order dated 28.12.2010 passed by the Odisha Sales Tax Tribunal, Cuttack (in short learned Tribunal ) in S.A. No. 114 of 1999-2000. FACTS : 2. The factual matrix leading to the case of the petitioner is that the petitioner carries on business in cars, motor vehicle spare parts and accessories being authorized dealer of car produced by M/s. Premier Automobiles Ltd., Mumbai. For carrying on its business, petitioner has three branches; one at Cantonment Road, Cuttack, Odisha; at Bhubaneswar, Odisha and at Mumbai, registered with STOC 150, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customer reaches at the registered office of the petitioner-company at Cuttack, petitioner-company at Cuttack undertakes necessary servicing, washing of the vehicle and then hand over the vehicle to the customer. According to the petitioner, the entire transaction is an inter-State transaction under section 3(a) of the Central Sales Tax Act, 1956 ( C.S.T. Act in short) and the same is not a intra-State transaction. After verifying the books of accounts and hearing the matter from the petitioner, the Sales Tax Officer without any valid reason, added ₹ 3,99,05,248.81 paise with the gross taxable turn over of the petitioner taking the sale of 176 numbers of cars as intra-State sale. Thereafter the petitioner preferred appeal under sub-section 1 of Section 23 of the Act raising several grounds to support its claim. The First Appellate Authority, Assistant Commissioner of Sales Tax held that the sale in question being inter-State sale is covered under section 3(a) of the Central Sales Tax Act and the same cannot be exigible under the State Sales Tax Act for which directed the deletion of the said amount of ₹ 3,99,05,248.81 paise from its gross turn over and re-assess the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opposite party-State submitted that the Tribunal has discussed all the points and in the peculiar fact and circumstances of the case, rightly had held that it is not a case of inter-State sale but is a case of intra-State sale. According to him, learned Tribunal has referred to the decision of the Hon ble Apex Court in Balabhagas Hulschand (supra) and come to the conclusion as stated above. 7. He further contended that the learned Tribunal has rightly held that whatever the Padmini car purchased from the M/s. Premier Automobiles Ltd., Mumbai by the petitioner, it is on behalf of the petitioner at his head office at Cuttack although it has got branch office at Mumbai who normally receives cars from the M/s. Premier Automobiles Ltd., Mumbai for which the law of agency having operated in full force, it is intra-State sale. He further stated that according to illustration at II-A given in the decision reported in Balabhagas Hulschand (supra), the sale by the petitioner, is outright intra-State sale inasmuch as the Mumbai branch of the petitioner purchased the goods and removed the goods to Cuttack for sale. He submitted that the decision reported in Rolta Motors Ltd (supra), Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of order for purchase and orders through the petitioner from the original manufacturer, are manufactured one for the purpose of this case. Finally he held that the dealer has manufactured documents to show as to give its transaction of cars of inter-State in nature instead of intra-State. 11. First appeal was preferred before the Assistant Commissioner of Sales Tax (ACST in short). After hearing, learned ACST observed that during 1995-96, 176 nos. of cars have not been included in the turn over by arraying the same as sale of cars as the same was under inter-State trade. He verified the documents again and found that the Mumbai branch of the petitioner has effected purchase of cars from the manufacturer, M/s. Premier Automobiles Ltd., Mumbai and despatched the vehicle to Cuttack for delivery. It is also revealed from his order that the branch office of the petitioner at Mumbai has registered itself as a dealer under Maharashtra Sales Tax Act and has paid local tax uptodate on sale of such cars to the customers of Odisha. He followed the judgment of Rolta Motors Ltd. (supra) and also the judgment in English Electronic Company of India (supra). After verifying the xerox copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equential assessment is to be done. 13. From the above observation of the learned Tribunal, we are of the view that the Tribunal has simply observed that the illustration II in the case of Balabhagas Hulschand (supra)can be applied and the petitioner at Cuttack branch being a authorized agent of premier padmini cars, could not have absolved its responsibility to pay tax to the State Government. Learned Tribunal found that the sale is intra-State without going deep into the matter. Learned Tribunal has not explained in the order as to how illustration II in the case of Balabhagas Hulschand (supra) would apply to the present case. 14. We have gone through the decision of the Balabhagas Hulschand (supra). In the said judgment, following three illustrations have been given by their Lordship. Case No.I-A is a dealer in goods in State X and enters into an agreement to sell his goods to in State X. In pursuance of the agreement a sends the goods from State X to State Y by booking the goods in the name of B. In such a case it is obvious that the sale is preceded by the movement of the goods and the movement of goods being in pursuance of a contract which eventually merges into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the contract it is a sale in the course of inter-State sale. It does not matter in which State the property in the goods passes. What is decisive is whether the sale is one which occasioned the movement of goods from one State to another the inter-State movement must be the result of a covenant, express or implied in the contract of state or an incident of the contract. 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. 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 movement must be specified in the contract itself. It will be enough if the movement is in pursuance of 2nd incidental to the contract of sale. (2) Branches have no independent and separate entity. Branches are different agencies. In the instant case, the contract of sale is between the appellant company and the Bombay buyer. 17. With due respect to the above decision, we find that the present fact and circumstances is covered by the facts of the aforesaid decision and we have no hesitation to hold that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference at all. The manufacture of the goods at the Hyderabad factory and their movement thereafter from Hyderabad to the branch office outside the State was an incident of the contract entered into with the buyer, for it was intended that the same goods should be delivered by the branch office to the buyer. There was no break in the movement of the goods. The branch office merely acted as a conduit through which the goods passed on their way to the buyer. It would have been a different matter if the particular goods had been dispatched by the registered office at Hyderabad to the branch office outside the State for sale in the open market and without reference to any order placed by the buyer. In such a case if the goods are purchased from the branch office, it is not a sale under which the goods commenced their movement from Hyderabad. It is a sale where the goods moved merely from the branch office to the buyer. The movement of the goods from the registered office at Hyderabad to the branch office outside the State cannot be regarded as an incident of the sale made to the buyer. 19. With no disagreement, we are of the considered view that the facts and circumstances of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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