TMI Blog1985 (9) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... held to be inter-State sales their inclusion in the assessment made under the corresponding State Sales Tax Acts should be deleted. We give liberty to the petitioner-company to make an application to the assessing authority concerned for the grant of such relief, and if the application is made within two months from today, we direct the said assessing authority to entertain the application, notwithstanding any period of limitation prescribed for such a proceeding, and to dispose of the claim in accordance with law. - Writ Petition No. 7337 of 1981 - - - Dated:- 10-9-1985 - PATHAK R.S. AND AMARENDRA NATH SEN JJ. Dr. Y.S. Chitale, Senior Advocate, D.N. Misra, Advocate, with him, for the petitioners. N.C. Talukdar and M.C. Bhandare, Senior Advocates, Miss A. Subhashini. M.N. Shroff and B. Parthasarathi, Advocates, with them, for the respondents. -------------------------------------------------- The judgment of the Court was delivered by PATHAK, J.- The first petitioner, M/s. Sahney Steel and Press Works Ltd. (hereinafter referred to as "the company"), is a public limited company having its registered office and factory at Hyderabad. The second petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by them where the customers are local parties. Where delivery has to be effected to customers of other States, the goods are despatched to them by the branch. The branches raise bills and receive the sales price. The branches furnish F forms to the registered office under section 6A of the Central Sales Tax Act in the case of stock transfers to the branches. These are the facts set forth in the writ petition. It appears that the sale of non-standard goods was assessed to State sales tax under the Sales Tax Acts of Maharashtra, West Bengal and Tamil Nadu. The Commercial Tax Officer, Company Circle-II, Hyderabad, however, expressed the view that the company was liable to Central sales tax on the turnover of non-standard goods and rejected the contention of the company that the pertinent turnover was not so liable. For the assessment year 1979-80 he made an assessment order dated May 4, 1981 assessing a turnover of Rs. 1,29,50,248.73 representing what the petitioners claimed to be stock transfers from the Hyderabad registered office to the branches outside the State of Andhra Pradesh. By way of abundant caution the petitioners had prayed that in the event of their objection to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed to various customers according to the orders received earlier. The Commercial Tax Officer also found that except for the manufacture of goods according to the specifications received from the customers at the registered office and factory at Hyderabad, all other activities including that of booking orders, sales despatching, billing and receiving of the sale price were being carried on by the branch offices situated outside the State of Andhra Pradesh. In the opinion of the Commercial Tax Officer the movement of the goods from Hyderabad to the stations outside the State was an incident of the contract incorporated in the specific orders procured by the branch offices, and therefore the transactions were inter-State sales within the terms of sub-section (a) of section 3 of the Central Sales Tax Act. The petitioners challenge the finding of the Commercial Tax Officer that the transactions in question constitute inter-State sales. The petitioners contend that when the registered office of the company at Hyderabad despatched the manufactured goods to its branch office it was merely a transfer of stock from the registered office to the branch office, and thereafter the movement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anches had no independent and separate entity, that they were merely different agencies, and even where a branch office sold the goods to the buyer it was a sale between the company and the buyer. It is true that in that case the goods, on manufacture at the Madras branch factory, were directly despatched to the Bombay buyer at his risk and all prices were shown f.o.r. Madras, and the goods were delivered to the Bombay buyer at Bhandup through clearing agents. In the instant case, the goods were despatched by the branch office situated outside the State of Andhra Pradesh to the buyer and not by the registered office at Hyderabad. In our opinion, that makes no difference at all. The manufacture of the goods at the Hyderabad factory and their movement thereafter from Hyderabad to the branch office outside the State was an incident of the contract entered into with the buyer, for it was intended that the same goods should be delivered by the branch office to the buyer. There was no break in the movement of the goods. The branch office merely acted as a conduit through which the goods passed on their way to the buyer. It would have been a different matter if the particular goods had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover in dispute related to sales made by the company to its dealers of trucks for being sold in the territories assigned to them under the dealership agreements. Each dealer was assigned an exclusive territory and under the agreement between the dealers and the company, they had to place their indents, pay the price of the goods to be purchased and obtain delivery orders from the Bombay office of the company. In pursuance of such delivery orders trucks used to be delivered in the State of Bihar to be taken over to the territories assigned to the dealers. Under the terms of the contracts of sale the purchasers were required to remove the goods from the State of Bihar to other States. The Court observed that if a contract of sale contained a stipulation for such movement, the sale would be an inter-State sale. Considerable reliance has been placed by the petitioners on one of the illustrations given by this Court in Balabhagas Hulaschand v. State of Orissa [1976] 37 STC 207 (SC) where case No. II was set out as follows: "Case No. II.-A, who is a dealer in State X, agrees to sell goods to B but he books the goods from State X to State Y in his own name and his agent in State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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