TMI Blog1976 (3) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to exemption under section 6(2) of the Act - Civil Appeal No. 1191 of 1973, - - - Dated:- 22-3-1976 - RAY G.A., BEG M.H. AND JASWANT SINGH JJ. C.K. Viswanatha Iyer, Senior Advocate (Mrs. S. GopalaKrishnan, Advocate, with him), for the appellant. S.T. Desai, Senior Advocate (A.V. Rangam and Miss A. Subhashini, Advocates, with him), for the respondent. -------------------------------------------------- The judgment of the Court was delivered by RAMANUJAM, J.- In the first case the question canvassed is whether the assessee is liable to be taxed in respect of a turnover of Rs. 7,41,393.62 consisting of Rs. 6,88,911.33 being the inter-State sales of cotton effected by the assessee to Nellai Cotton Mills, Tirunelveli, and Rs. 52,482.29 being the inter- State sales of cotton effected by the assessee to Karur Mills. The Tribunal took the view that the sales in question have been effected by transfer of documents of title during inter-State movement, that as such the sales are second inter-State sales coming under section 3(b) of the Central Sales Tax Act and that as the assessee has not furnished the required declarations in form C relating to thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Act. We are inclined to agree with both the above contentions. The Tribunal has, in the guise of rectifying an error apparent on the face of the record, purported to review its own decision and come to an entirely different conclusion altogether. This, we are clear, the Tribunal had no jurisdiction to do under section 55. Further the revised decision of the Tribunal holding the transactions not liable to tax under the Central Sales Tax Act cannot be sustained in view of the retrospective amendment of section 9 of the Central Sales Tax Act. The learned counsel for the assessee does not dispute the fact that the said amendment of section 9 of the Central Sales Tax Act will nullify the revised decision of the Tribunal. Hence Tax Case No. 225 of 1969 has to be allowed and, accordingly, it is allowed, but without costs. Then we come to the merits of the first case, T.C. No. 197 of 1968. As already stated, the disputed turnover is Rs. 7,41,393.62 representing the second inter-State sales effected by the assessee during the assessment year to the mills at Tirunelveli and Karur. The learned counsel for the assessee questions the assessment on the said turnover on three ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay receipts duly endorsed in their favour. It cannot, therefore, be said that there is an unconditional appropriation of the goods at Bombay towards the contract entered into by the assessee with the buyer-mills. That will be an unconditional appropriation of the goods to the contract of sale which the Bombay seller has entered into with the assessee. As pointed out in Indira Bai v. State of Madras [1958] 9 S.T.C. 80., the inference that the property in the goods will pass to the buyer when the goods are delivered to the railway or the common carrier is rebutted if the seller deals with the railway receipt in such a way as to show that he did not intend to part with the goods until payment was made. Here the Bombay seller had no privity of contract with the buyer-mills and they sold the cotton only to the assessee, and the railway receipts were sent only to the assessee who later endorsed them to the buyer-mills and collected major portion of the sale value. The sale by the Bombay seller to the assessee will be an inter-State sale under section 3(a) as having occasioned inter-State movement of the goods. But the sale by the assessee to the buyer-mills cannot be said to have cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade or commerce, no tax under the said Act shall be payable by any dealer, where the tax has been levied and collected in respect of the sale or purchase of such declared goods under section 4 of the Madras General Sales Tax Act, 1959. The assessee contends that the buyer-mills had paid tax on their purchases of cotton and, therefore, the same transaction cannot be brought to charge in his hands as inter-State sale. But if the transaction attracts levy of tax under the Central Sales Tax Act, it is not taxable under the Madras General Sales Tax Act. If the buyer- mills have paid the tax on the mistaken impression that their purchase is taxable under the Madras General Sales Tax Act, they may be entitled to claim a refund on the ground that the tax has been paid under a mistake. But that will not enable the assessee to claim the benefit of the exemption. Besides, in our view, the above exemption applies only to cases where the claimant himself has paid tax under section 4 of the Madras General Sales Tax Act in respect of local sales preceding the inter-State transactions. In view of the fact that the assessee himself had not paid the tax under the said section 4, he is not entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t forward by the assessee are rejected and the tax case is dismissed with costs, Counsel's fee Rs. 250. The judgment of the Court was delivered by RAY, C.J. -This appeal by special leave is from the judgment dated November 7, 1972, of the High Court of Madras. The principal question in this appeal is whether the sales of cotton by the appellant to the mills at Tirunelveli and Karur were inter-State sales under section 3(a) of the Central Sales Tax Act called the Central Act or are second sales under State sales under section 3(b) of the Central Act. The appellant has its place of business at Coimbatore. The mills are situated within the State of Madras. The mills entered into an agreement with the appellant for purchase of cotton. The appellant in turn placed orders with its sellers at Bombay for purchase of cotton. The appellant directed its Bombay sellers to despatch the goods to the mills as consignees. The Bombay seller sent the consignment to the mills but the railway receipts were sent by the Bombay seller to the appellant. The appellant then endorsed the same in favour of the mills after collection of the substantial portion of the sale price. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3602 was issued in exercise of powers conferred by section 8(5) of the Central Act. The appellant contended that the mills paid the tax on their purchases of cotton and the same transaction could not be brought to charge in the hands of the appellant as inter-State sale. If the transaction attracts levy of tax under the Central Act it is not taxable under the Madras Act. If the mills had paid tax under the impression that their purchases are taxable under the Madras Act that will not enable the appellant to claim the benefit of the exemption. The exemption applies only to cases where the claimant has paid tax himself under section 4 of the Madras Act in respect of local sales preceding the inter-State transactions. The appellant in the present case did not pay tax under section 4 of the Madras Act. The High Court, therefore, correctly held that the appellant was not entitled to claim exemption under the Government Order. The third contention of the appellant was that the appellant was entitled to exemption in respect of the turnover under section 6(2) of the Central Act. Section 6(2) of the Central Act lays down that where a sale in the course of inter-State trade or commerce of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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