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2021 (2) TMI 247 - HC - VAT and Sales TaxJurisdiction - Inter-state sales or not - resident dealer in Tamil Nadu or not - Assessing Officer was of the view that since the furnished goods manufactured by M/s.UHEL moved to other states from the State of Tamil Nadu, the State of Tamil Nadu is the appropriate State to assess the transactions under Section 9(1) of the CST Act - HELD THAT:- Section 3 of the CST Act falls under Chapter 2, which is a chapter dealing with formulation of principles for determining when sale or purchase of goods takes place in the course of inter-state trade or commerce or outside a State or in the course of import or export. Section 3 explains as to when a sale or purchase of goods is said to take place in the course of inter-state trade or commerce. To qualify as a sale to have been taken place in the course of inter-state trade or commerce, two conditions have been stipulated, which are highly exclusive on account of the use of the expression "or" - Therefore, if the sale or purchase occasions the movement of goods from one State or another, it would qualify for a sale in the course of inter-state trade or commerce or if a sale or purchase is effected by a transfer of documents of title to the goods during the movement from one State to another, it would qualify as a sale in the course of inter-state trade or commerce. The Tribunal took note of the sub-contract entered into between the first respondent-assessee and M/s.UEHL, dated 24.06.1983. The terms and conditions of the said subcontract have been extracted in paragraph 14 of the impugned order passed by the Tribunal. On a perusal of the same, it is abundantly clear that what has been entrusted to M/s.UEHL is only a job work. The contract entered into by the first respondent-assessee with a party in Orissa or any other State is the main contract, for which, the assessee has entered into a sub-contract by supplying raw materials, so as to enable the sub-contractor to manufacture as per the design supplied by the first respondent-assessee. The first respondent-assessee has further instructed the sub-contractor, upon permission of the job worker to despatch the goods directly to others where the contract is being performed and is being fulfilled by the first respondent. Whether movement of goods from the State of Tamil Nadu, at the instance of the sub-contractor, to another State, could be construed as a sale in the course of inter-state trade or commerce. Indisputably, the title to the goods, though in the form of a raw material, continued to remain with the first respondent-assessee. What was entrusted with the UEHL was only a job work and the specifications have been clearly set out in the sub-contract. Therefore, the Tribunal rightly took into consideration the nature of the transaction and also took note of the important fact that the contract is a composite contract executed by the first respondent outside the State of Andhra Pradesh, for which, the first respondent showed various materials pertaining to various job workers for various purpose and the contracts were executed only by the first respondent at the designated place, which is situated outside the State of Andhra Pradesh. The Tribunal has not committed any error for us to substitute our opinion. Furthermore, the manner in which the Tribunal has appreciated the nature of contract and as to how the title to the goods was never transferred to M/s.UEHL are all findings on facts, which are perverse or unsustainable for us to interfere under Article 226 of The Constitution of India - Petition dismissed.
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