TMI Blog1994 (7) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... DIP SINGH, J.- The Sales Tax Tribunal, Orissa ("the Tribunal") stated a case and referred the following question for the opinion of the High Court: "Whether, on the facts and in the circumstances of the case, the Member, Sales Tax Tribunal, is correct in holding that even sales in the course of inter- State trade and commerce can be sales inside the State if the goods are inside the State of Orissa, and whether his interpretation of the definition of 'sale' as given in section 2(g) of the Orissa Sales Tax Act, 1947, and the explanation attached to the definition of 'sale' is correct." The High Court answered the question in the affirmative and in favour of the assessee. These appeals by the State of Orissa are against the judgment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate of registration as being intended for resale by him in Orissa and on sales to a registered dealer of containers and other materials for the packing of such goods: Provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration, the price of goods so utilised shall be included in his taxable turnover." "Sale" is defined in section 2(g) of the Act to mean as under: ".......with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unregistered dealer or is a transaction in respect of which no declaration has been furnished even when the purchasing dealer is a registered dealer. Section 5(2)(A)(a)(ii) authorises a dealer to exclude from the 'gross turnover' the sales to a registered dealer of goods specified in the purchasing dealer's certificate of registration as being intended for resale by him in Orissa. The proviso occurring in section 5(2)(A)(a)(ii) requires the sale price of goods used by the purchasing dealer for the purposes other than those mentioned in his certificate of registration to be included in his taxable turnover. The assessee before us had purchased biri from registered dealers and had furnished declarations. It is not disputed that it was entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State of Orissa the sales could not be in the course of inter-State trade. To make a sale in the course of inter-State trade, it is necessary that the contract must envisage the completion of the sale as well as the movement of the goods to the other State in the course of inter-State trade. The very fact that the sales in dispute were the sales in the course of inter-State trade, they could not be the sales within the State in terms of section 2(g) of the Act. The Act provides for a single point levy and the tax is payable at one point or the other. When the assessee purchased the goods free of tax by giving an undertaking that the goods would be resold within the State of Orissa and subsequently violates the undertaking by sellin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the export of goods out of the territory of India cannot be a sale at the same time within the State of Orissa. On the same principles, a sale in the course of inter-State trade and commerce cannot be a sale within the State of Orissa. There is, thus, patent violation of the undertaking given by the assessee. This Court in Himatsingka Timber Co. Ltd. v. State of Orissa [1966] 18 STC 235 (SC) dealing with section 5(2)(a)(ii) of the Act held as under: "The tax was always leviable on the first sale and it would have been so levied but for the certificate which was furnished by the company when making purchases from the local dealers. The certificate was that the sleepers and timber were for resale in Orissa and when that condition was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transported from one State to another cannot be made a lever for the argument that though the sale is in the course of inter- State trade and commerce but nevertheless it is a sale within the State of Orissa under section 2(g) of the Act. Our answer to the question referred, therefore, on the facts and in the circumstances of this case, is that the Member, Sales Tax Tribunal, was not correct in holding that even the sales in the course of inter-State trade and commerce can be sales inside the State if the goods were inside the State of Orissa and for coming to that conclusion, the Tribunal wrongly and illegally relied upon the definition of "sale" under section 2(g) of the Act including the explanation therein. We allow the appeals, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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