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TMI Blog2017 (10) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Jammu & Kashmir - no evidence was relied upon to establish a disconnect between the purchase of goods and their dispatch outside this State. This was therefore clearly a purchase in the course of inter-State trade and commerce referable to Section 3(a) of the 1956 Act. There is no material to establish that the purchase of goods and their dispatch to the State of Jammu & Kashmir were not part of the same transaction. The movement of the goods from this State to the State of Jammu & Kashmir was occasioned by and directly linked to the purchases effected by the revisionist within the State - revision allowed. - Sales/Trade Tax Revision No. 28, 29, 30 of 2011 - - - Dated:- 10-10-2017 - Hon'ble Yashwant Varma, J. For the Applicant : Nikhil Agrawal,Shri Dhruv Agrawal For the Opposite Party : C.S.C. ORDER Hon'ble Yashwant Varma, J. Heard Sri Nikhil Agrawal, learned counsel for the revisionist and Sri B.K. Pandey, who appeared for the State-respondent. These three revisions of which the first two pertain to Assessment Years 2005-06 and 2006-07 and TTR No. 30 of 2011 emanate from proceedings which give rise to common questions of law and can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny part of the mentha oil which was purchased within the State of U.P. was in fact sold within this State. The primary submission of Sri Agrawal was based upon the fact that the purchases were made with a clear and pre-existing intent of transferring the purchased commodity to its Head Office. He has referred to the disclosures made before the Department at the time of registration in which he submits that the revisionist clearly held out that it was acting only as an agent in one sense of the concern to effect purchases of mentha oil with the avowed intent of transferring the same to the State of Jammu Kashmir. His submission was that these purchases within the State of U.P. clearly fell within the ambit of Section 3(a) of the Central Sales Tax Act, 19562 and that therefore no tax could have possibly been levied upon these transactions. Sri Agrawal has placed reliance upon the decisions of the Supreme Court in English Electric Company of India Ltd. Vs. The Deputy Commercial Tax Officer And Others [1973] 31 S.T.C. 115 and Commissioner of Sales Tax, U.P. And Others Vs. M/s Bakhtawar Lal Kailash Chand Arhti And Others 1992 (3) SCC 750. Sri Agarwal has further submitted that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Authority and the Tribunal however does not commend acceptance. A Branch Office does not of its own have a separate and distinct legal existence. Be it a Head Office or a Branch Office, they are only arms of the one singular entity which is the concern. This issue need not detain the Court as it has been authoritatively ruled upon in English Electric Company. That there can possibly be no contract of sale between the offices of one entity/concern is a proposition which cannot be open to doubt or debate. It is in this context that the Supreme Court in English Electric Company observed that branches have no independent and separate legal identity and are only different agencies of a common concern. The Court deems it appropriate to extract the following principles enunciated by the Supreme Court in its decision in English Electric Company to drive home the point:- There was not and there could not be any contract of sale between the factory of the seller appellant at Madras branch and the Bombay branch of the appellant. It is obvious that the Bombay branch is the agent of the seller-appellant. The appellant could not be the buyer as well as the seller. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusions arrived at by both the Assessing Authority as well as the Tribunal would result in this Court accepting those very propositions which were unequivocally negatived by the Supreme Court in M/s Bakhtawar Lal. In the facts of the present case, there is no material to establish that the purchase of goods and their dispatch to the State of Jammu Kashmir were not part of the same transaction. The movement of the goods from this State to the State of Jammu Kashmir was occasioned by and directly linked to the purchases effected by the revisionist within the State. The following observations made by the Supreme Court in M/s Bakhtawar Lal Kailash Chand Arhti And Others would be relevant and are extracted herein below: 9. The decision in Kholsa and Co. explains that to be called an inter-State sale or purchase, it is not necessary that the contract of sale must expressly provide for and/or stipulate the movement of goods from one State to the other; it is enough if such movement of goods is implicit in the contract of sale. If, however, the movement of goods is neither expressly provided for in the contract nor is it implicit in it, the movement of goods from one State to ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Be that as it may, the true position has since been explained in the later decision in Khosla and Co. It is immaterial whether a completed sale precedes the movement of goods or follows the movement of goods, or for that matter, takes place while the goods are in transit. What is important is that the movement of goods and the sale must be inseparably connected. The ratio of Balabhagas is this: if the goods move from one State to another in pursuance of an agreement of sale and the sale is completed in the other State, it is an inter-State sale. The observations relied upon by Sri Sehgal do not constitute the ratio of the decision and cannot come to the rescue of appellant-State. Indeed, if one looks to the language employed in clause (a) of Section 3 it seems to suggest that the movement of goods follows upon and is the necessary consequence of the sale or purchase, as case may be, and not the other way round. 16. Sri Sehgal is equally not right in saying that movement of goods from the State of U.P. to other State(s) is immaterial and that the U.P. Legislature is competent to tax each and every purchase that takes place within that State. Ordinarily, it is so, but where a sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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