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TMI Blog1962 (11) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... meshwar Nath and P.L. Vohra, Advocates of Rajinder Narain & Co., with him), for the Interveners. -------------------------------------------------- The Judgment of the Court was delivered by KAPUR, J.-This appeal by certificate of the High Court of Kerala raises the question of the taxability of sales of tea under the Travancore- Cochin General Sales Tax Act, hereinafter termed the Act and the Rules made thereunder. The assessment period is 1952-53 and the turnover was of a sum of Rs. 3,77,644 on which a tax of Rs. 5,900-11 was levied. The appellant before us is the assessee-company and the respondent is the Deputy Commissioner of Agricultural Income-tax and Sales Tax. Mr. A. V. Viswanatha Sastri on behalf of Outcherloney Valley ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the godowns at Willingdon Island which was in the State of Travancore-Cochin, samples of those teas etc. were taken to Fort Cochin which at the relevant time was in the State of Madras. There by the samples the teas were sold by public auction in lots, some were purchased in their entirety and others in parts and after the consideration money was paid at Fort Cochin delivery orders were given to the buyers addressed to the godown keepers at Willingdon Island and actual delivery of tea was taken there. These teas were then sent out from Willingdon Island in Travancore-Cochin for consumption either in other parts of India or were exported out of India. The taxability of the sales of teas in the manner above-mentioned will depend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with sale by auction reads as follows: "In the case of a sale by auction- (1) where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of the separate contract of sale; (2) the sale is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner; and, until such announcements is made, any bidder may retract his bid." Specific goods in section 2(14) of the Sale of Goods Act means goods identified and agreed upon at the time the contract is made. Therefore on the fall of the hammer the offer is accepted and if the goods are specified goods the title passes to the buyer. In the present case as soon as the hammer fell the title in the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cochin. The purchase money was paid there and the purchaser obtained from the auctioneer delivery notes directing the godown keepers at Willingdon Island to deliver the goods and only the actual physical delivery of the goods took place at Willingdon Island. In these circumstances the question is whether the sale was "outside sale" or "inside sale" as the expression have been compendiously used in various judgments to indicate sales taking place within a State or without it. The Explanation to Article 286(1)(a) which has been set out above explains what a sale outside the State is. According to that Explanation a fiction is created as between two States, one where the goods are delivered for consumption in that State and the other where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es." The majority decision in India Copper Corporation Ltd. v. State of Bihar [1961] 2 S.C.R. 276, 286; 12 S.T.C. 56, 64., concludes the point in favour of the appellant. On the facts of this case it was found by the Sales Tax Appellate Tribunal that in regard to the sales of tea in "full lots" the property passed at Fort Cochin and this view has not been challenged in this Court. Therefore, on the majority decision in India Copper Corporation Ltd. v. State of Bihar [1961] 2 S.C.R. 276, 286; 12 S.T.C. 56, 64., the only State which would have the power to levy a tax on such sale would be the State of Madras and so far as Travancore-Cochin was concerned, the sale would be an outside sale. In the present case, therefore, the sale was an "out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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