TMI Blog1965 (12) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... April 23, 1962, on a reference by the Bombay Sales Tax Tribunal under section 34(1) of the Bombay Sales Tax Act, 1953. The appellant is a manufacturer of foot-wear in Bombay. During the assessment year April 1, 1954, to March 31, 1955, the appellant purchased rubber from certain dealers residing in the State of Cochin. These purchases were assessed to purchase tax by the Sales Tax Officer under section 10(a) of the Bombay Sales Tax Act (Bombay Act 3 of 1953-hereinafter referred to as the Act) as they were made "from a person who is not a registered dealer". The Cochin sellers had their agents in Bombay who received orders on behalf of the appellant. The orders of the appellant were accepted by the agents in Bombay and the goods were shipped by the sellers from Cochin to Bombay. After the goods were shipped, the demand drafts were forwarded along with the bills of lading by the vendors to their bankers in Bombay. The bankers endorsed the bill of lading in Bombay and handed it over to purchasers in Bombay in exchange for the price. The price was also paid in Bombay. In the bills of lading the sellers in Cochin were described as both consignors and consignees. After the goods were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant who also paid freight and other charges. The bills of lading were sent by the sellers through the bank to be delivered to the buyers in Bombay on payment of the price of the goods. In view of these facts, the High Court held that the property was intended by the parties to pass in Bombay and the endorsement in the invoice that the goods were being shipped "on account of and at the risk of the buyers" did not mean anything more than that the insurance charges were to be paid by the buyers. On behalf of the appellant, Mr. Donde submitted that the property in the rubber consignments had passed to the appellants in Cochin. In our opinion, there is no warrant for this submission and the view taken by the High Court is correct. The law is well-established that in the case of a contract for sale of unascertained goods the property does not pass to the purchaser unless there is unconditional appropriation of the goods in a deliverable state to the contract. In the case of such a contract, delivery of the goods by the vendor to the common carrier is an appropriation sufficient to pass the property. But there is a difference in the legal effect of delivering goods to a common c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the seller or his agent, the seller is prima facie deemed to reserve the right of disposal. * * * *" On behalf of the appellant it was contended that the goods were shipped "on account and at the risk of Messrs. Carona Sahu and Company (P.) Ltd." and therefore the property in the goods must be held to have passed to the appellant on shipment in Cochin. We do not think there is any substance in this argument. The endorsement in the invoice merely indicated that the insurance charges were to be paid by the appellant and the clause has no bearing on the question of the passing of title. In Shepherd v. Harrison [1871] L.R. 5 H.L. 116., the plaintiff in England sent an order to P and Co. at Pernambuco to buy cotton for the plaintiff. P and Co. bought cotton on account of the plaintiff and made out an invoice "on account and risk of M/s. John Shepherd Co." but the bills of lading were taken deliverable to P and Co.'s order or assigns paying freight. The invoice was sent directly to the plaintiff but the bills of lading were endorsed in blank by P and Co. and sent with the bill of exchange to their own agents in England. The English agents forwarded the bills of lading with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells goods to or buys goods from its members. Section 2(11) defines a "registered dealer" to mean a dealer registered under section 11 or deemed to be a registered dealer under section 12B. According to section 2(13) "sale" means a sale of goods made within the pre-Reorganisation State of Bombay, excluding the transferred territories for cash or deferred payment or other valuable consideration and includes any supply by a society or club or an association to its members on payment of price or fees or subscription, but does not include a mortgage, hypothecation, charge or pledge. Section 6 of the Act is to the following effect: "(1) Subject to any rules made under section 18B there shall be paid by every dealer who is liable to pay tax under this Act- (ia) sales tax or purchase tax on his sales or purchases in accordance with the provisions of section 7A, (a) a sales tax on his sales levied in accordance with the provisions of section 8. (b) a general sales tax on his sales levied in accordance with the provisions of section 9, and (c) a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext or language of the section for importing any qualification on the plain meaning of that expression. That section plainly states that purchases made by a dealer from a person who is not a registered dealer will be subject to purchase tax. The appellant is a dealer and it has made the purchases in question from the sellers who are not registered dealers. The provisions of section 10(a) of the Act are satisfied in the present case and the purchases in question accordingly are liable to tax. The next contention of Mr. Donde is that the provisions of section 10(a) cannot apply to transactions of purchase where the purchased goods have been brought from outside the State of Bombay for consumption in that State because section 10C of the Act would apply to such transactions. We do not think there is any warrant in this argument. Section 10C reproduces the Explanation to Article 286(1)(a) of the Constitution and it would apply where under general law the sale takes place outside the State but the goods are delivered as a direct result of the sales for consumption within the State of Bombay. The buyer referred to in section 10C need not necessarily be a dealer under the Act, becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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