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2015 (3) TMI 786 - SUPREME COURTDenial of exemption claim - Inter state sale or intra state sale - assessee had purchased `Beedi' leaves, by participating in the auction conducted by the Forest Department, Government of Andhra Pradesh - After the purchase, the assessee had dispatched the said `Beedi' leaves to the head office in the State of Maharashtra - Whether the transactions in question are exigible to tax in the State of Andhra Pradesh under the provisions of the Act - Held that:- Assessee-herein is a branch office which procures `Beedi' leaves from the seller. The seller had issued a notice inviting for the tenders and the tender quotes stating the rate per kg at which the prospective purchasers desire to purchase the `Beedi' leaf to be collected, cured, bagged in trade bags and delivered at the godown of a unit. The assessee had participated in the auction pursuant to the aforesaid invitation and succeeded in its offer. With regard to the conditions of completion of the sale transaction, it is relevant to notice Rule 3(13) of Andhra Pradesh Minor Forest Produce (Regulation of Trade in Abnus Leaves) Rules, 1970 which are applicable to the tender issued by the seller. - The tender schedule, as issued by the seller, also stipulates that the purchaser should remove the stocks from the godowns within 30 days of issue of delivery orders failing which the purchaser will have to pay the godown rent and other expenses on watch and ward, insurance etc. Further, the period for which the stocks remain in the godown, the seller shall not be responsible for any deterioration in the quality of `Beedi' leaves during the storage in godown. Based on the aforementioned stipulations, it is clear that the delivery of the goods is complete at the godown of the seller on payment of the amount of the agreed consideration. It can be inferred that the events of sale of goods by the seller and the movement of goods from the State of Andhra Pradesh to another State are not inextricably connected and independent of each other. There is no incident of direct sale between the seller and the head office of the respondent-Company in the State of Maharashtra. It is the branch office that purchases the goods and receives them subsequent to payment made by it to the seller and thereafter, transfers it to the head office of the respondent-Company in the State of Maharashtra. The incidence of sale is complete once the purchaser, that is, the branch office renders the payment for the goods. Once the sale transaction concludes in the State of Andhra Pradesh only, the mere transport of goods from branch office in Andhra Pradesh to the head office in Maharashtra would not result in an inter-State sale. Therefore, the sale or purchase of the `Beedi' leaves in the present case do not occasion the movement of the goods outside the State in order to qualify as an inter-State sale under Section 3(a) of the CST ACT and therefore, is exigible to tax under the Act. - impugned judgment and order passed by the High Court cannot be sustained and requires to be set aside - Decided in favour of Revenue.
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