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TMI Blog1968 (8) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... ales Tax. It was contended on behalf of the respondent that the entire turnover was of sales in the course of export of manganese ore out of India and, alternatively, the sales were inter-State sales, and, therefore, not liable to be taxed under the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter called "the Act"). The objection was rejected by the Appellate Assistant Commissioner, who dismissed the appeal. In second appeal the Board of Revenue accepted the contention of the respondent that the sales were in the course of inter-State trade or commerce, and, therefore, could not be assessed to sales tax under the Act. Taking this view the Board of Revenue remanded the matter to the Sales Tax Officer for assessment under the Central Sales Tax Act, 1956. At the instance of the respondent, the Board of Revenue made a reference to the Madhya Pradesh High Court under section 44 of the Act on the following question of law: "Whether, in the facts and circumstances of the case, the disputed sales of manganese amounting to Rs. 2,77,976.45 were sales in the course of inter-State trade and commerce or were intrastate sales." By its judgment dated 26th November, 1965, the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the movement of the goods from one State to another by transfer of documents of title thereto: clause (a) of section 3 covers sales, other than those included in clause (b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State." This observation of Shah, J., was cited with approval by this court in Cement Marketing Co. v. State of Mysore [1963] 14 S.T.C. 175., and again in State Trading Corporation v. State of Mysore [1963] 14 S.T.C. 188. In the later case, Sarkar, J., observed thus: "The question then is, did the sales occasion the movement of cement from another State into Mysore within the meaning of the definition. In Tata Iron & Steel Co. Ltd. v. S.R. Sarkar [1960] 11 S.T.C. 655., it was held that a sale occasions the movement of goods from one State to another within section 3(a) of the Central Sales Tax Act, when the movement 'is the result of a covenant or incident of the contract of sale'. That the cement concerned in the disputed sales was actually moved from another State into Mysore is not denied. The respondents only contend that the movement was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration to the fact that two of the four contracts provided delivery of the goods f.o.r. loading point in the State of Madhya Pradesh and the transportation of the goods from the State to a place outside was subsequent to the passing of the title to the buyers within the State of Madhya Pradesh. We are unable to accept the argument put forward by the Attorney-General as correct. Having examined the terms of the four contracts in the present case, we are satisfied that the performance of each one of the contracts necessarily involved the movement of goods from the State of Madhya Pradesh to the State of Maharashtra or to the State of Andhra Pradesh. The relevant clauses of the contract with M/s. Ram Bahadur Thakur & Co. dated 22nd July, 1957, are as follows: "The sellers agree to sell and the buyers agree to purchase 500 tons (five hundred tons only), 10% more or less Indian hard lumpy manganese ore practically free from dust and fines and not more than 5% to pass through a 20 Mosh Tyler's Sieve of either of the following metallurgical specifications on terms and conditions hereinafter noted... II. Price: The price of goods mentioned in clause I Grade 'A' above shall be Rs. 165 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Sales Tax Act and were not liable to be taxed under the Madhya Pradesh General Sales Tax Act. The legal position with regard to other two contracts, viz., the con- tracts dated 10th November, 1956, and 29th May, 1958, with M/s. B.P. Khemka & Co. is the same. The relevant portions of the contract dated 10th November, 1956, are to the following effect: "An agreement of sale, made and entered into on this tenth day of November, nineteen hundred fifty-six between Buyers: B.P. Khemka Private Ltd., 5, Clive Row, Calcutta-1, having their branch office at New Colony, Nagpur-1. Sellers: Allwyn Cooper, Wardha Road, Nagpur-1. IT IS AGREED AS FOLLOWS: That the buyers have agreed to purchase from the sellers and the sellers have agreed to sell to the buyers 500 (five hundred only) long tons of high grade manganese ore, 10% more or less, of the specifications mentioned on the terms and conditions stated as under: Price: Rs. 152 (Rupees one hundred and fifty-two only) per long ton of 2240 lbs. plus railway freight from the station, Katangjhiri, to the port of Vishakhapatnam shall be the F.O.R. Vishakhapatnam Port rate. The buyers shall pay at Rs. 152 per long ton to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid to the sellers by the buyers on receipt of satisfactory analysis report from Messrs. Essen & Company, Nagpur. The balance 10 per cent. value shall be paid and the account finally settled after the goods have been loaded, weighed, despatched to the port and the goods have been finally received in the plots of the buyers at the port. The final invoice shall be prepared by the sellers on the basis of the analysis results obtained from Messrs. Hughes & Davies, Bombay, after ascertaining the weight of the ore from the railway weigh- bridge at Gondia. Weight: First weighments of wagons as recorded at Gondia railway weigh-bridge shall be final and binding on both the parties. Loading: Since wagons are allotted and supplied only to export quota holders, the buyers shall indent for necessary number of wagons against their quota slip to load and despatch the above quantity of manganese ore to the port. The sellers shall load the wagons at their cost and expenses as and when they are placed at their disposal. Delivery of the ore under this agreement shall be complete when it has been received in the plots of the buyers at the port..." It is evident that in these two contracts there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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