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TMI Blog1967 (2) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... 286(1)(a) of the Constitution read with the Explanation thereto and therefore were exempt from the imposition of tax under the C.P. and Berar Sales Tax Act, 1947. Except for the amounts which varied from year to year involved in the sales, the facts and circumstances were common in all the three cases. The periods for which tax was sought to be imposed were: from 1st July, 1950 to 30th June, 1951, from 1st July, 1951 to 30th June, 1952, and from 1st July, 1952 to 30th June, 1953. It will be noted that all the three periods are prior to the amendment of Article 286 of the Constitution by the Constitution (Sixth Amendment) Act, 1956. The relevant portion of Article 286 as it stood during the years in question read as follows: "286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation.-For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or notional delivery, e.g., by entrusting the goods to a common carrier, or even by delivery of documents of title like railway receipts. It was said that the rule contained in section 39(1) of the Indian Sale of Goods Act, 1930, has no application in dealing with a constitutional provision which while imposing a restriction upon the legislative power of the States entrusts exclusive power to levy sales tax to the State in which the goods have been actually delivered for the purpose of consumption." The fiction of the sale or purchase being deemed to have taken place in the State in which the goods had been actually delivered as a direct result of sale or purchase for the purpose of consumption in that State, was resorted to in order to put the matter beyond all controversy on the question as to where the property in the goods passed or as to any inquiry about the place where the goods may be said to have been delivered. The contract in this case was entered into between the President of India and the appellant before us and contained terms and conditions to be noted immediately. The recital to the agreement shows that "the contractor has agreed to supply and deliver to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for inspection and bear the charges thereof." Clause 9 provides for testing of the sleepers by the Sleeper Passing Officer and any sleepers which were rejected by him were to be removed from the railway premises at the charge and cost of the contractor. Under clause 10 the Sleeper Control Officer was to give the contractor a passing certificate of the number passed and rejected at such station. Under clause 11(a) "After passing, the contractor shall apply to and obtain from the Sleeper Control Officer, Eastern Group, his orders as to the despatch of the passed sleepers which would then be disposed of by the contractor either by handing them over to the consignee or by loading into railway wagons and booking them under the risk note 'B' by rail to the consignee to whom the sleepers were allotted." Clause 11(f) provides that on arrival at destination, the consignee shall check the number of sleepers and report on any shortage or the receipt of defective sleepers. In all cases, the Sleeper Control Officer was to be the final authority as to whether such sleepers were in good order and conformed to the specification or not. Clauses 11(g), 11(i) and 12 ran as follows: Clause 11(g). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." The schedule to the contract was in tabular form containing six columns. The 3rd column was headed "places at which to be delivered" and below it was mentioned "Dhamtari, Eastern Railway." The 5th column was headed "rate at which the sleepers to be supplied at each place inclusive of all demands, F.O.R." In this column were given the rates for different kinds of sleepers, i.e., of different dimensions. The 6th column was headed "month of completion" and in this column (to quote from the document at page 112 of the paper book) was given the date 15th October, 1952. The third note at the foot of the schedule provided that "the date of completion of the contract shall be the last date of inspection at the supplier's stations during the month in which the contract is due to be completed." The High Court of Madhya Pradesh took the view that the sales were completed in Dhamtari, that the property in the goods passed to the purchaser at that place and the sleepers were actually delivered to the purchaser at that place. It was further stated in the judgment of the High Court that the place of delivery was specifically stated to be F.O.R. Dhamtari. The last observation does not seem to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the rejected sleepers had to be taken out of the railway yard leading to the inference that only such goods as had been passed by the Sleeper Passing Officer were to be considered as the property of the railway. Great reliance was placed on clause 11(a) which according to counsel, clinched the matter. It was urged that if the goods were actually handed over to the consignee at Dhamtari railway station, there could be no manner of doubt that actual delivery took place there. According to counsel the position was the same if the goods were loaded into railway wagons and booked to the consignee under risk note 'B' in terms of the contract. This was sought to be fortified by reference to clause 11(i) according to which the contractor was to be paid for all sleepers shown on the tally receipt. Counsel urged that all the above provisions in the contract went to show that as soon as the goods were put on rail at Dhamtari after they had been brought into the railway yard and passed by the Sleeper Passing Officer, and marks had been put on them, delivery of the goods was complete and nothing remained to be done by the contractor. In our opinion, we have got to take the whole of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace in Bihar since the sleepers had been manufactured in Nepal and despatched from Jogbani railway station to places outside Bihar. The full terms of the contract in that case are not to be found in the report but it appears that it was worded very similarly to the contract before us. The Patna High Court held that on a consideration of all the provisions of the contract, it was manifest that the goods in question had been unconditionally appropriated to the contract at Jogbani railway station. Alternatively, the High Court held that there was appropriation of the goods within the meaning of section 23(2) of the Sale of Goods Act at Jogbani railway station and accordingly it was held that there was delivery to the carrier at Jogbani railway station coupled with an unconditional appropriation of the goods within the meaning of section 23(2) of the Sale of Goods Act. With regard to clauses 11(g), 11(j) and 13(a) the High Court said that these were merely additional stipulations superimposed on the contractor who agreed to act as insurer of the goods till the stage of final destination and also agreed to the other conditions, but these additional conditions had no bearing on the que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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