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2008 (9) TMI 896 - HC - VAT and Sales TaxSales of ATMs - whetehr from Pondicherry to banks who are purchasers in Karnataka are local sales liable to tax under the KST Act and the KVAT Act? Held that:- In the case on hand it is not a case of transfer of right to use the goods.It is also not a case of oral or implied transfer of the rights to use goods.There is a written contract between the parties for manufacture and supply of goods. The branch office at Bangalore, forwarded an order for transfer of goods upon receipt by them from the buyer to their factory at Pondicherry. The goods were manufactured according to the specifications of the buyer.Thereafter the goods were handed over to a carrier who delivered the goods at the buyer's place. The technicians at the registered office at Bangalore took delivery of the consignment at the buyer's place, opened the containers, checked and after it is found to be all right in all respects handed over the goods to the buyer. The buyer in turn has made the payment directly to the factory at Pondicherry. Though the goods for which orders were placed were not in existence at the time of placing of the orders, it is not a case of transfer of a right to use the goods. It is a case of sale of the goods. The placing of the orders occasioned the movement of the goods from Pondicherry to Bangalore. The goods, after they were manufactured, thus came into existence at Pondicherry and were moved to Bangalore. Therefore, it is immaterial where the goods were delivered. In this case, there is a movement of goods from one State to another in terms of a contract of sale. It is an inter-State sale. The situs of the sale or purchase is immaterial in respect of inter-State trade or commerce. If the sale or purchase occasioned the movement of goods from one State to another then it constitutes an interState sale and the State Legislature has no competence to tax such sale as the sale is taxed under the CST Act. The KST Act or the KVAT Act is not applicable to such sale. The impugned orders passed are therefore contrary to the settled legal position and the statutory provisions and the same cannot be sustained. Accordingly Writ petitions are allowed.
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