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2005 (2) TMI 786 - HC - VAT and Sales TaxAuction sales of sandalwood in Tamil Nadu - chargeable to tax u/s 8 of the Central Sales Tax Act 1956 and not under the Tamil Nadu Act - Whether the transactions under question are inter-State sales or intra-State sales - HELD THAT - In the present case it cannot be said that the petitioner was under any obligation of any nature to transport the sandalwood after purchase in Tamil Nadu to the State of Karnataka. No doubt as held by the Supreme Court in the above decision the obligation may be imposed either expressly by the contract or impliedly by a mutual understanding. However in this case even by implication it cannot be said that the petitioner was under any obligation to transport the goods from Tamil Nadu to Karnataka. The goods were purchased by the petitioner itself in Tamil Nadu (through its officers) and surely it cannot be said that the petitioner was under obligation to itself to transport the goods from Tamil Nadu to Karnataka. A can be under obligation to B but surely A cannot be under an obligation to A himself. After having purchased the sandalwood in Tamil Nadu the petitioner could do whatever he linked with it and he was under no obligation to transport it to Karnataka and that he did so was of his own choice and volition and not under any obligation. No doubt the petitioner obtained necessary permits under the Karnataka and Tamil Nadu Acts and obtained the necessary incometax certificate but that was all voluntary and of its own choice. If the petitioner had not chosen to transport the goods to Karnataka it may have suffered from the business point of view as it would not get the necessary raw materials for its factory in Bangalore but that does not amount to saying that it was under any legal obligation either express or implied to transport the goods to Karnataka. Hence the auction sales cannot be called inter-State sales. Writ appeals and petitions dismissed.
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