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TMI Blog1957 (3) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... 44-45 while O. S. No. 44 of 1949 was laid for the recovery of ₹ 8,356-0-0 collected in the accounting year 1945-46. The third suit O. S. 23 of 1949 relates to the year 1946-47 and is laid for a judgment for a declaration and injunction as stated above. The plaintiff was a dealer in groundnut oil carrying on business at Kurnool. He purchased oil and sold it to various persons outside the State. The goods were transported to places beyond Madras State by rail. 2. It was averred in the plaints that the railway receipts, invoices for the goods and the hundies were lodged with bankers to be discounted and for collection of the price from the buyers to whom the railway receipts were delivered only against payment, and as such the sales did not occur within the province of Madras. Consequently the levy was illegal and the sales-tax authorities had to make good the amounts collected by them from the plaintiff. 3. The answer to these suits was four-fold: (1) civil courts have no jurisdiction to entertain the suits; (2) all the sales were completed within the province of Madras and were therefore properly assessed; (3) there was no sufficient compliance with Section 80 C. P. C. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment must be made in protest; (2) it should be in satisfaction of a claim made by the Revenue Authorities; and lastly (3) it should relate to arrears of revenue or demands recoverable as such arrears. 7. It is unnecessary to consider whether the expression revenue authorities would include pales tax officers or whether the tax in question would fall within the clause on account of demands recoverable as such arrears, since it is said that in the instant cases the plaintiff made advance payments under Rule 13 of the Turnover and Assessment Rules. 8. In this situation it could not be posited either that the payments were made under protest or that they were made in satisfaction of a claim made by the Revenue Authorities. Nor is the other condition complied with in these two cases. The statement of the counsel for the appellants is substantiated by Exs. B-1 to B-24 and B-36 to B79 and is endorsed by the learned Government Pleader. We feel these cases come within the operation of Article 62 having regard to the recitals in the plaint. As the actions were raised within three years of the payments they are well within time. This position is not disputed by Mr. Venkatesam app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left with the other two categories. It is urged by Mr. Ramachandra Rao that the transactions involved in these two types of cases also do not satisfy the definition of sale in the Madras General Sales Tax Act as it stood then, Sale is defined in Section 2(h) of the Act as every transfer of property in goods by one person to another in the course of trade or business for cash or for deferred payment or for other valuable consideration and includes also a transfer of property in goods involved in the execution of a works contract but does not include a mortgage, hypothecation or pledge. 13. Thus, what determines the situs of sale is a place where the property in the goods passes to the buyer. The principles for deciding whether and when the property in the goods is transferred to the buyer are laid down in Sections 19 to 25 of the Indian Sales of Goods Act. Section 19 recites: (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. (2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d transmits the bill of exchange and bill of lading to the buyer together, to secure acceptance of payment of the bill of exchange, the buyer is bound to return the bill of lading if he does not honour the bill of exchange and if he wrongfully retains the bill of lading the property in the goods does not pass to him. It is manifest that prima facie when the goods are delivered to the buyer or to the common carrier to be transmitted to the buyer property in the goods vests in the buyer. But this is subject to the reservation of the right of disposal of me goods made by the seller. This right of the seller could be proved either by the terms of contract or by appropriation or it could be inferred from the conduct of the parties or the surrounding circumstances. In the absence of any specific agreement or of intention to be gathered in the manner stated above, the buyer becomes the owner of the goods the moment the goods are delivered to him or to the railway which is deemed to be the agent of the buyer for purposes of carrying it to the buyer. It is urged by Mr. Ramachandra Rao that the seller must be regarded as having remained the owner of the goods till the payment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an issue raised. Further, he deposed only with reference to Ex. A-1 which is a statement of goods sold by the plaintiff pre-pared by the counsel. He talked of the railway receipts being endorsed by us. It is unlikely that a godown keeper of one of the buyers would have been deputed for the purpose of taking delivery of the goods at Kurnool, or authorised to make the necessary endorsement. Moreover, he could only speak of transactions with reference to one buyer and does not cover all the sales to persons outside the province. It does not appear from the record as to the value of the sales made to the firm of which P. W. 1 was a godown keeper. So, the evidence of P. W. 1 does not carry the plaintiffs very far. 15. Again, the testimony of P. W. 1 is not admissible as regards the endorsement on the railway receipts. The contents of a document may be proved either by primary or secondary evidence. In this case, secondary evidence was sought to be given of the endorsement on R. Rs. Under Section 63 of the Evidence Act, such evidence could he furnished by some person who had himself made it or seen it. P. W. 1 does not say that he either himself made the endorsement or had it seen b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pass that property for anything less than payment, and what motive is there for such an intention? The appellants, M/s. Lundgren and Rollven, have to show that it passed to them and passed, too, before the beginning of the voyage. If it did, then the consignors no longer owned the goods and had nothing to show against them except a draft of their own, which could not be enforced and a bill of lading, which would not entitle them to delivery of the goods, though its retention might seriously inconvenience the owners, the consignees. Rights to stop in Transit or to exercise an unpaid vendor's lien need hardly be discussed, for, one question of intention in fact as to which there is a good deal of evidence it would be artificial to assume that the consignors minds were actually determined to the contrary by consideration of legal remedies, of which it is not shown that they had any knowledge, let the legal presumption be what it will ......... Cases, in which it has been held that taking the bill of lading in the shipper's own name negatives any unconditional appropriation to the buyer by the delivery of the goods on shipboard and indicates one conditional on the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eller has to ship or acquire after that shipment the contract goods as to which, if unascertained, he is generally required to give a notice of appropriation. On or after shipment he has to obtain proper hills of lading and proper policies of insurance. He fulfils his contract by transferring the bills of lading and the policies to the buyer. As a general rule, he does so only against payment of the price, less the freight which the buyer has to pay. In the invoice which accompanies the tender of the documents on the 'prompt' -- that is the date fixed for payment -- the freight is deducted, for this reason. In this course of business, the general property in the goods remains in the seller until he transfers the bills of lading. Another reason why the learned Judges said that there was no transfer of the ownership of the goods was by that time the goods were put on board they had entered the export stream and therefore would be in the course of export. When once the goods started on their journey to a foreign destination they are protected by Article 286 (1) of the Constitution. The second contract for the delivery of the goods which was on the f. o. b. terms w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responsible for any loss or leakage on the way and that the purchaser should bear the losses. The creditor was debited with the bill amount on the date of the railway receipt as admitted by the plaintiff as P. W. 3. These are some of the considerations which, in our opinion, are conclusive on the question. It follows that the sales coming under categories Nos. 2 and 3 occurred with in the province of Madras and were consequently properly assessable and the assessment in regard to this could not be impugned. 24. We will next proceed to consider the contention raised for the appellants that the whole assessment was invalid by reason of it having included an illegal levy. This is an additional ground raised long after the filing of the appeal taking advantage of the judgment of the Supreme Court in Ram Narain Sons Ltd. v. Assistant Sales Tax Commissioner, (S) [1955]2SCR483 . The request for permission to raise this ground was not opposed by the learned Government Pleader and we have permitted the appellant to urge it. Similar request was also granted in A. S. Nos. 281 of 1951 and 295, 296, 993 and 994 of 1952 : (AIR 1958 A P 670) in this Court. The rule stated in the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a procedure is barred and the assessment is bad wholly. In the light of this statement, of law, it is difficult to affirm the residue although it forms the major part of the assessment. Assessment which is bad in part is infected throughout and should be treated as invalid. For these reasons, we must hold that all the assessments are invalid in toto. This does not preclude the taxing authorities from reassessing them if so advised and if permissible in law. The appeals are therefore allowed. But having regard to the fact that we allowed the appellant to a raise a new ground at the time of arguments and other circumstances we think it is a fit case in which the parties should bear their own costs. 25a. There remains for consideration the cross-objections in A. S. 566 of 1951. The only objection pressed upon us is the one bearing on Section 80 C. P. C. It was maintained, by Mr. Venkatesam for the Government Pleader that the notice issued by the appellant did not fulfil the terms of Section 80 for the reason that it was issued before the cause of action had arisen. The argument is that at the time of the issue of notice an appeal filed by the appellant before the District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al assessment order afforded a cause of action to the appellant and could form the basis of a notice under Section 80. 28. It was alternatively contended by Mr. Venkatesam that it was stated in the notice that an appeal was filed against the order complained of and that a suit will be filed for the reliefs mentioned therein only in the event of the appeal going against him and this indicates that the plaintiff himself did not treat the original order as given him cause of action. It was added by him that as laid down by the Privy Council in Bhagchand Dagdusa v. Secretary of State, the provisions of Section 80 are explicit and mandatory and do not admit of exceptions and implications and should be strictly construed. We do not think that this submission of the learned counsel can prevail. The scope of the principle enunciated in that ruling should be limited to cases where there is no compliance with Section 80, C. P. C. The terms of notice under Section 80 should not be taken in a narrow sense, the object of that section being merely to inform the defendant of the grounds or complaint. Simply because it is stated that an appeal was filed against the order which was sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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