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TMI Blog2017 (1) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... 6B of the Central Excise Rules - the understanding of the assessing officer is that the petitioners have attempted to establish that the movement of goods from Hyderabad to Nagpur is in accordance with the contract for supply of Combat Missiles to the Armed Forces. Held that: - The assessing officer holds that the movement of semi finished goods from Hyderabad to Nagpur cannot be construed as a mere stop over in the inter-State movement as projected by the petitioners/dealer. The final product was appropriated at Nagpur in the form of a missile as per the contract entered with Armed Forces, which is despatched from Nagpur to the customer after pre-delivery inspection. - The assessing officer concludes that both situs of sales and appropriation of the goods is effected within the State of Maharashtra. Hence, the Maharashtra State is the appropriate State for the purpose of levy and collection of the Central Sales Tax on the transactions. It is on that footing that the assessment order has been passed. There is a fundamental error, in the understanding of the assessing officer, of the provisions of the Central Sales Tax Act, 1956. We had to elaborately analyse the provisions on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it a different or distinct article or goods, then, we do not think any assistance can be derived from the judgment of the Andhra Pradesh High Court [2011 (4) TMI 1010 - Andhra Pradesh High Court]. That is distinguishable on facts. Once we have held that there is a fundamental and basic legal error so also the assumptions on the part of the assessing officer being untenable in law, we do not think that the writ petition cannot be entertained. There may be remedies available to challenge the assessment order, but it is not that there is any absolute bar to entertain a writ petition under Article 226 of the Constitution of India against an assessment order. Once that assessment order is found to be vitiated in law and the assessing officer exceeding his powers, authority and jurisdiction, then, in the absence of a factual dispute, a writ petition would lie. In the present case, we have entertained it to correct the legal error. Writ petition allowed - decided in favor of appellant. - Writ Petition No. 11393 of 2015 - - - Dated:- 10-1-2017 - S. C. Dharmadhikari And B. P. Colabawalla, JJ. Mr. V. Sridharan - Senior Advocate with Mr. Prakash Shah and Mr. Rahul Thakar i/b. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the purview of the inter-Government agreement dated 12th February, 1998, NPOM and the petitioner shall have equal ownership on industrial and/or intellectual property, including inventions, industrial designs/models and other scientific and technical results on know-how, information etc., acquired by them in the course of implementation of the contracts and their supplements between them under the said agreement. These agreements have not been referred to and the terms thereof need not detain us. 8. It is stated that pursuant to this agreement, a manufacturing unit of the petitioner has been set up at Hyderabad, erstwhile United State of Andhra Pradesh and presently the State of Telangana. The manufacturing unit has been established in the year 2001 and the manufacturing facility came in for operation from 2007-08. During the interregnum period of 2001-08, the petitioner has been importing fully integrated missiles from its joint venture partner, namely, NPOM and has been effecting sales of the same to the Indian Armed Forces. Consequent on the completion of the manufacturing facility in the year 2007-08, the petitioner has been importing missiles in Semi-Knocked Condition ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of storage. The Nagpur office issues F form prescribed by Section 6-A of the CST Act read with rule 12(5) of CST (R T) Rules 1957. 'F' form is prescribed to prove that the movement of goods from one State to another was occasioned by reason of transfer of such goods is not by reason of a sale and that the goods are meant for storage. 15. The Combat missile which is manufactured by the petitioner at its Hyderabad unit which is complete in all respects except with warhead is sent to Nagpur unit for the purpose of integration of warhead and subsequently dispatched to the Indian Armed Forces from Nagpur as directed by the Hyderabad office. 16. The process of dispatch is initiated by the Hyderabad branch by sending the made to order fully finished missile without warhead to Nagpur branch for job work of warhead integration and issuing of the despatch note i.e. PDI-JRI Programme (Pre Delivery Inspection - Joint Receipt Inspection) from Hyderabad upon completion of job work. 17. The Petitioner also relies on Rule 16B of the Central Excise Rules 2002, which empowers the Commissioner to permit a manufacturer of the final product to send the inputs / partially processed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PDI-JRI Program Note to despatch the said missiles after warhead integration to the concerned unit of Indian Armed Forces. Till such time the Nagpur branch would have no knowledge to whom the missile is to be sent. The petitioner has treated the said transactions as inter-state sales of Missiles effected from its Hyderabad unit and accordingly charged and collected CST @ 14.5% and paid the same to its assessing authority namely the Assistant Commissioner (CT) (LTU), Saroornagar Division, Hyderabad (earlier united State of Andhra Pradesh). In respect of warhead integrated Combat Missiles supplied to the Indian Navy Unit located at Visakhapatnam, relating to the first contract, the petitioner charged and collected APVAT @ 14.5% and paid the same to its assessing authority namely the Assistant Commissioner (CT) (LTU), Saroornagar Division, Hyderabad (earlier united State of Andhra Pradesh), the third respondent herein. 21. Rule 16B of the Central Excise Rules 2002 deals with Special Procedure for removal of semi-finished goods for certain puroses. Sub-rule (6) of Rule 4 empowers the Commissioner to permit a manufacturer of the final product to send goods to a jobworkers for job wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order semi-finished missile to Nagpur branch for job work and issuing of the despatch note i.e. PDI-JRI Programme (Pre Delivery Inspection - Joint Receipt Inspection) from Hyderabad upon completion of job work. The petitioner also relied on Rule 16 B of the Central Excise Rules 2002, which empowers the Commissioner to permit a principal manufacturer of the final product to send the inputs / partially processed inputs / semi-finished goods to a job worker and impose such conditions including the manner in which duty, if leviable, is to be paid, allow final products to be cleared from the premises of the job worker. It is in exercise of this power the Commissioner of Customs and Central Excise, Hyderabad-II, issued permission to the petitioner's branch at Hyderabad to send semi finished goods to the job worker, namely, the petitioners' branch situated at Bothli, Butibori, Nagpur, and allowed job worked missiles to be cleared from Nagpur. In the Commissioner's permission dated 30th March, 2012, the Trade Notice dated 23rd January, 2004 has been mentioned. According to the Trade Notice, the job worker after completion of the warhead integration, should send the duplicate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent to the petitioners' Nagpur branch merely for the purpose of despatching along with other warhead integrated Combat Missiles that were despatched from Nagpur unit. 29. It is in the above circumstances that this petition has been filed. 30. Mr. Sridharan, learned senior counsel appearing for the petitioners would submit that the impugned assessment order is contrary to law. It is entirely contrary to the settled principles, inasmuch as the goods if at all they can be treated as such, are not marketable. They are meant for the use by the Department for the safety and security of the country. It is, therefore, clear that though the Government of India places an order for the said missiles, the transactions cannot be treated as a normal sale. Thus, the sale of missiles to the Indian Armed Forces is not exigible to tax. Since the missiles are procured, assembled and delivered to Indian Armed Forces pursuant to the specifications by the Union of India, then, the impugned assessment order erroneously assumes this to be another market transaction. 31. Mr. Sridharan submits that the assembly and production of Brahmos Missiles takes place at the Hyderabad facility. The parts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r explaining the process of despatch of the missile, Mr. Sridharan would submit that as all the sales have been effected from the Petitioners' manufacturing unit located at Hyderabad and in view of the peculiarity and sensitivity of the goods involved, the missile completed in all respects had been dispatched to its Nagpur unit for warhead integration and with clear subsequent instructions by PDI-JRI Program Note to dispatch the said missiles after warhead integration to the concerned unit of the Indian Armed Forces. Till such time the Nagpur branch would have no knowledge to whom the missile is to be sent. The Petitioner has treated the said transactions as inter-State sales of Missiles effected from its Hyderabad unit and accordingly charged and collected CST @14.5% and paid the same to is assessing authority namely the Assistant Commissioner (CT) (LTU), Saroornagar Division, Hyderabad, (earlier united State of Andhra Pradesh). However, in respect of Warhead integrated Combat Missiles supplied to the Indian Navy Unit located at Vishakhapatnam, relating to the second contract, the Petitioner charged and collected APVAT @ 14.5% and paid the same to its assessing authority namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Karnataka 1984 AIR 744, wherein it was held that, in the facts of that case, the property in the materials which are used in execution of the jobs entrusted to the contractor became the property of the Government before it was used. Accordingly, there was no sale between Hindustan Aeronautics and Government of India. 40. By placing reliance on the aforesaid decision, Mr. Sridharan submits that the transaction does not attract any further levy. 41. Mr. Sridharan has relied upon the following decisions in support of the above contentions:- (i) Commissioner of Commercial Taxes vs. Hindustan Aeronautics Ltd., 1972(29) STC 438 (ii) Hindustan Aeronautics Ltd. vs. State of Orissa, 1984(55) STC 327. (iii) Shafeeq Shameem and Co. and Anr. vs. The state of Andhra Pradesh, 1964(15) STC 828. (iv) State of Uttar Pradesh and Ors. vs. Kores (India) Ltd., 1977(39) STC 8 (SC). (v) Sarvodaya Printing Press, Nagpur vs. State of Maharashtra, 1994 Mh. L. J. 1322. (vi) State of Maharashtra vs. Sarvodaya Printing Press Fine Art Printer (1999) 9 SCC 65. (vii) State of Tamil Nadu vs. Anandam Vishwanatham (1989) 1 SCC 613. (viii) Bharat Electronics Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds were transferred to Nagpur just for a finishing or a job work of warhead integration, yet, what has been discovered from their own records is that all the major components of missiles are imported and stored at Nagpur after their import from Russia. They are moved from Nagpur to Hyderabad for assembly as semi finished missile and the semi finished goods are then transferred from Hyderabad to Nagpur for warhead integration and final assembly of the Brahmos Missiles. Thus, the movement of finished goods has occasioned from the State of Maharashtra. Therefore, it is a inter-State sale from the State of Maharashtra. Mr. Sonpal submits that both situs of sale and the appropriation of the goods is in the State of Maharashtra. The movement of finished goods, namely, Brahmos Supersonic Cruise Missile as intended to be supplied to the Defence Forces has occasioned from the State of Maharashtra. Therefore, Maharashtra is the appropriate State for the purpose of levy and collection of the Central Sales Tax of the transaction. That is how the dealer is assessed by considering the despatches of finished goods as sales from Nagpur. Mr.Sonpal has relied upon this factual aspect to submit that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern; (ii) any transaction in connection with or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern. 46. Similarly, for our purpose, the definition of the term dealer as appearing in section 2(b) is important. It reads as under:- 2(b) dealer means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash or for deferred payment, or for commission remuneration or other valuable consideration, and includes - (i) a local authority, a body corporate, a company, any co-operative society or other society, club, firm, Hindu undivided family or other association of persons which carries on such business; (ii) a factor, broker, commission agent, del credere agent, or any other mercantile agent, by whatever name called, and whether of the same description as hereinbefore mentioned or not, who carries on the business of buying, selling, supplying or distributing, goods belonging to any principal whether disclosed or not; and (iii) an auct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Principles . These principles and formulated for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import or export. The definitions to which we have made a reference above enable the legislature to formulate these principles in details. That is why section 3, which elaborates as to when a sale or purchase of goods is said to take place in the course of inter-State trade or commerce is important. That section reads as under:- 3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce. - A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase - (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1. - Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, by sub-section (1) of section 4, which is subject to the provisions contained in section 3, when a sale or purchase of goods is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States. By sub-section (2), the legislature, by a deeming provision, indicates as to when a sale or purchase of goods shall be deemed to take place inside a State. If the goods are within the State in the case of specific or certain goods at the time the contract of sale is made and in the case of un-ascertained or future goods at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party prior or subsequent to such appropriation, such sale or purchase of goods shall be deemed to take place inside a State. 52. Since Mr. Sonpal relies upon section 5, we would reproduce it:- 5. When is a sale or purchase of goods said to take place in the course of import or export. - (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by sub-section (1), every dealer shall be liable to pay tax under the Central Sales Tax Act, 1956 on all sales of goods other than electrical energy effected by him in the course of inter-State trade or commerce during any year on and from the date so notified. By sub-section (1-A) of section 6, the liability of the dealer to pay Central Sales Tax on a sale of any goods effected by him in the course of inter-State trade or commerce arises even if no tax would have been leviable whether on the seller or the purchaser under the sales tax law of the appropriate State if that sale had taken place inside that State. Which inter-State sale and in relation to goods covered by sub-section (3) of section 8 shall be exempt from tax under the CST Act is then set out in sub-section (2) of section 6. By sub-section (3) of section 6 and which is the provision overriding anything contained in the Act, no Central Sales Tax is payable by any dealer in respect of sale of any goods made by such dealer and which sale takes place within the purview of sub-section (3) of section 6. Thus, this whole Chapter provides for the inter-State sales tax. In this also fall sections 7, 8 and 9 and which provide f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he state; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly: Provided that if in any state or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matter specified in this subsection. (2-A) All the provisions relating to offences, interest and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulation, express or implied, regarding inter-State movement of goods; (ii) the goods must actually move from one State to another, pursuant to such contract of sale; the sale being the proximate cause of movement; and (iii) such movement of goods must be from one State to another State where the sale concludes. It follows as a necessary corollary of these principles that a movement of goods which takes place independently of a contract of sale would not fall within the meaning of inter-State sale. In other words, if there is no contract of sale preceding the movement of goods, obviously the movement cannot be attributed to the contract of sale. Similarly, if the transaction of sale stands completed within the State and the movement of goods takes place thereafter, it would obviously be independently of the contract of sale and necessarily by or on behalf of the purchaser alone and, therefore, the transaction would not be having an inter- State element. Precedents are legion; we may briefly refer to some of them. In English Electric Company of India Ltd. v. Deputy Commercial Tax Officer, 1977(1) SCR 631, this Court held that when the movement of the goods from one State to another i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decisions in Manganese Ore (India) Limited v. The Regional Assistant Commissioner (1976 (3) S.C.R.99 and Union of India v. K. S. Khosla and Company Limited (1979) 43 S.T.C.457. Similarly, where the question arises, in which State is the tax leviable, one must look to and apply the test in Section 9(1); no other provision is relevant on this question. 18. We may at this stage refer to the decision of the Bombay High Court in Commissioner of Sales Tax v. Barium Chemicals Limited (1981) 48 S.T.C. 121. A particular transaction of inter-State sale was subjected to Central Sales Tax in Andhra Pradesh. The same sale was again sought to be taxed under Central Sales Tax Act in Maharashtra, which was questioned. The High Court adopted the following approach: Central Sales Tax is levied and Collected by the Central Government; it is immaterial in which State it is collected; it cannot be levied or collected twice over; the State Governments are merely agents of the Central Government in the matter of levy and collection of Central Sales Tax; if so, once levied and collected in one State, rightly or wrongly it cannot be levied and collected in another State. In our opinion, this may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fence, Government of India. That was placed at its headquarters at New Delhi. That such missiles are assumed to be goods for the purpose of the Central Sales Tax Act, 1956. The further assumption on which the petitioners have proceeded is that the Central Sales Tax Act, 1956 could be invoked and applied to the transaction and deal in the present case. That the petitioners and consequently those solitary share holders, representing India and Russia together make this corporate entity, a dealer for the purposes of the Central Sales Tax Act, 1956. Therefore, there was indeed a case made out for invoking section 3 of the Central Sales Tax Act, 1956. Finally, the petitioners proceeded on the assumption that the State of Andhra Pradesh could have taxed the transactions even though that position is seriously disputed by the petitioners and they have filed a writ petition challenging the assessment orders passed against them by the Sales Tax/VAT Commissionerate of the State of Andhra Pradesh. Hence, without in any manner prejudicing the contentions raised in that pending writ petition, the petitioners have submitted to the jurisdiction of the assessing authority and further to this court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferred to another State for conducting further manufacturing process and the delivery from that State was never subject matter before these courts. 65. The assessing officer holds that the movement of semi finished goods from Hyderabad to Nagpur cannot be construed as a mere stop over in the inter-State movement as projected by the petitioners/dealer. The final product was appropriated at Nagpur in the form of a missile as per the contract entered with Armed Forces, which is despatched from Nagpur to the customer after pre-delivery inspection. This is not a branch transaction of warhead from Nagpur to Hyderabad as claimed by the dealer (petitioners) before us in the audit report. Hence, that cannot be allowed. It is held that all major components of missiles are imported and are stored at Nagpur (including warheads) after the import from Russia. They are moved from Nagpur to Hyderabad for their assembly as semi finished missiles and the semi finished job is again transferred from Hyderabad for warhead integration and final assembly of Brahmos Missiles. On this basis, the ultimate conclusion is that the movement of finished goods, namely, Brahmos Supersonic Missiles, as intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lise in the manufacture of particular type or class of machinery - in the interest of avoiding duplication and enhancing efficiency. Generally speaking, BHEL is engaged in the manufacture of heavy electrical machinery including equipment and material necessary for setting up power plants. Its dead Office is at New Delhi. It appears that whenever it undertakes to set up a power-generation plant, it enters into two contracts, one for the supply of machinery and equipment called the Supply Contract and the other for installation or erection of the plant called Service Contract . Once the job is undertaken, the Head Office sends instructions to relevant units to manufacture the appropriate machinery. For illustrating its method of working, we may take a concrete instance,viz., the setting up of five captive power plants [120 MW each] for the aluminium smelter complex at Angul, Orissa for the National Aluminium Company Limited, Bhuvaneshwar [NALCO], which too is a public sector undertaking. The facts relating to this contract are the following: on August 1, 1981, NALCO invited tenders for the said work. BHEL also submitted its tender. It was accepted. NALCO issued a Letter of Intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d levying and demanding Central Sales Tax upon the value of the parts and components which were manufactured at Hyderabad unit and sent to Tiruchi or Anguls as the case may be for incorporation into boiler system manufactured by Tiruchi unit. BHEL protested against the said levy. It submitted that it has been paying the Central Sales Tax upon the value of the entire boiler system manufactured by the Tiruchi unit in the Tamil Nadu State and that if Central Sales Tax is levied upon the parts and components which were manufactured at Hyderabad and sent to Tiruchi or Angul for incorporation into the boiler system, it would amount to double taxation insofar as the said parts and Components are concerned. According to it, they were merely branch transfers. The Andhra Pradesh State did not agree. Similar stand was taken by other States as well and assessment proceedings were in progress in various States. It is at that stage that BHEL approached this Court by way of Writ Petition (C) No.1608 of 1987 under Article 32 of the Constitution complaining that more than one State is taxing the same sale under the provision of the Act, which is making its functioning difficult. It submitted that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h this difference: BHEL impleaded the States of Tamil Nadu, Uttar Pradesh, Karnataka Madhya Pradesh, Delhi and Union of India in addition to the State of Andhra Pradesh as respondents to the writ petitions and also claimed for a direction to the respondents to adjust the Central Sales Tax collected by them in such a manner that the amount is kept, or remitted to the State, which is lawfully entitled to levy it and the States no entitled to levy it do not keep the tax amounts collected by them. The batch of writ petitions have been disposed of by the High Court following its decision in the Tax Revision Cases. The High Court has, however, declined to give a direction for adjustment of tax as between the States as asked by BHEL mainly on the ground that this Court was seized of the matter. It left the matter to this Court. 22. Whether a particular sale is an inter-State sale or an inter-State sale is essentially a question of fact. Perhaps, it may be more appropriative to say that it is a mixed question of fact and law. It is, therefore, necessary to ascertain the factual position first. In Civil Appeals Nos.5369-75 of 1996 and 5362-68 of 1996, it is this: whenever BHEL enters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect despatch of goods by the Hyderabad unit to Angul or Farakka constitutes an inter-State sale with in the leaning of Section 3(a) and that tax thereon is leviable in the State of Andhra Pradesh according to Section 9(1) of the Act. .. 68. From the above position, we do not see how the assessing officer in this case concludes that none of the decisions cited before him deal with a situation when the semi finished goods traveled from one State to another or that components and parts to manufacture the ultimate or final product are not supplied by various locations of the dealer in several States. Therefore, if one does not dispute the factual position that there is a headquarter of the petitioners at New Delhi, it is that headquarter which receives orders for supply of Combat and other Missiles. It is in pursuance and furtherance of the execution of such an order that the requisite steps are taken. Therefore, it is clear that it is the establishment at Hyderabad, where the components are assembled, which makes the missiles. For the missile to be a Combat Missile, the warhead integration has to take place. Meaning thereby a warhead has to be fixed and fitted on this missile. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and re-pressurized. The front portion of missile is detached and the warhead is fitted. That is how the missile is ready for use in situation like a war. The process has also been explained to us in detail by Mr. Sridharan. He has relied upon the written submissions. 70. It is in these circumstances that we have no hesitation in agreeing with the petitioners that the movement of goods has been made pursuant to an agreement of sale with the President of India. The Ministry of Defence receives the missiles for use in times of war and also for training. Once the matter is covered by the judgment of the Hon'ble Supreme Court of India and noted above, then, we do not think that any other view is possible. 71. The view taken by the assessing officer cannot be supported in law. The assessing officer ought to have appreciated that this is not a case where there is any dispute about facts. Further, there is no dispute as to whether this is a inter-State or intra- State sale. Clearly, both sides understood the controversy as emanating from the admitted inter-State sale. Therefore, it is only a question of the authority of the agent to collect the tax on behalf of the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der as also the revisional order was assailed before the Andhra Pradesh High Court. It is in dealing with such a controversy that the Andhra Pradesh High Court made the observations in para 15. Therefore, if the goods are sold as they are and are not incorporated in or did not form part of other goods, would the question of such transfer of goods, attributing levy of tax under the Central Sales Tax Act, 1956, as inter-State sale, arise. These observations are made in the context of the facts before the Andhra Pradesh High Court, namely, that the Machilipatnam unit supplied the goods, which are mere components. They got incorporated in the goods manufactured by other units located outside the State of Andhra Pradesh. Thus, the goods transferred by Machilipatnam unit are not sold to Armed Force as they are. Mr. Sonpal would rely upon these observations in isolation and without appreciating the factual background. Before us, the controversy is not like the one in the Andhra Pradesh case. Before us, it is agreed that the petitioners manufactured missiles. These missiles are manufactured at the unit at Hyderabad. These missiles, only for warhead integration, are brought to Nagpur. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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