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TMI Blog2023 (9) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer during the movement from one State to another State. The main grounds of refusal to grant exemption to the petitioner, under Section 6(3) of the Central Sales Tax Act, 1956, by all the Authorities below are that the transfer of title/sale by the petitioner to the ultimate buyer was effected before the commencement of movement and not during the movement of the goods in question which finding on considering the facts and circumstances of the case and provisions of law, is perverse and misinterpretation of relevant provisions of the Act and the notification in question. The respondents could not show any piece of evidence to establish that the subsequent sale to the ultimate buyer effected prior to the commencement of movement of goods in question as defined under Section 6(2) read with explanation 2 and 3 under Section 3 of the Central Sales Tax Act as well as the aforesaid notification dated 4th October, 2010. The impugned order of all the impugned Authorities are not sustainable in law - Petition disposed off. - MD. NIZAMUDDIN, J. For the Petitioner : Mr. J.P. Khaitan, Ld. Sr. Adv. For the State : Mr. A. Ray, Ld. GP., Mr. T.M. Siddiqui, Mr. T. Chakr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fected by transfer of document of title to such goods to a registered dealer, shall be exempt from tax under this act, In the instant case the dealer has failed to fulfil these conditions. Mere production of C E-1 forms does not prove the transfer of documents of title to goods when the goods are in transit. All these are supportive evidence, but no the sole evidence in support of this claim. So this claim cannot be allowed. Against the aforesaid assessment order rejecting the claim of the petitioner, petitioner filed appeal before the Appellate Authority which was dismissed by the Appellate Authority by recording the reason particularly paragraph 3 of the said order of the Appellate Authority is relevant, which is recorded as hereunder: 3) Claim of sales of Rs. 237218408/-(with C and E1 Forms) and Rs. 1425153/-(with C Form) u/s 6(2) of the Act had been rightly disallowed by the Ld. Assessing Authority. For the benefit of exemption, subsequent sale of any goods must be effected by transfer of document of title to such goods to a registered dealer during movement of such goods. So it is clear that, title must be transferred during movement of goods. In all cases of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dealer has effected the purported inter-state sales under u/s 3(b) not during the movement of goods from one State to another, pursuant to sales u/s 3(a) but prior to the commencement of movement of goods from one State to another. Hence the conditions as laid down u/s 6(2) are not fulfilled in this case. Hence, we are of the view that as per judgement of Hon ble Apex Court these consignment notes were not endorsed during the course of movement. Hence the claim of subsequent sale u/s 6(2) of the CST Act 56 in the instant case is not allowable. Before dealing and discussing and concluding the matter some relevant provisions of Central Sales Tax, 1956 which are quoted hereunder: 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 oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself are altogether different in case of inter state sale, pre-existing order or pre-determined parties will not negate any 3(b) sale if other requirements are found fulfilled i.e. physical or constructive transfer of documents of title to the goods in made; On a plain reading of Section 3 along with explanation (i) and (ii) and Section 6(2) of the Central Sales Tax Act along with the aforesaid Trade circular it clearly appears that the commencement of movement of the goods is effected in case of movement from one State to another State from the time of delivery of such consignment to the transporter and is terminated at the time when delivery is taken from such transporter and also is effected by transfer of documents of title of such consignment to a subsequent buyer during the movement from one State to another State. It also appears from the aforesaid notification on a plain reading that in case of inter-State sale, pre-existing order or pre-determined parties will not negate any 3(b) sale, if other requirements are found fulfilled i.e. physical or constructive transfer of documents of title to the goods is made and sale in such type of cases is different from a contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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