TMI Blog1977 (6) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... delivered by SETHURAMAN, J.- These tax revision cases arise out of an order of the Sales Tax Appellate Tribunal dated 7th February, 1974, in four appeals relating to the assessment years 1968-69 to 1971-72. The assessee is a dealer in ship's stores and is also doing business as ship chandlers. The assessee imports goods from abroad for the purpose of supplying the said goods either to foreign going vessels or to diplomatic personnel. The said goods, which are imported, are received in a customs bonded warehouse and at the time of placing the indent and also in the subsequent bills of lading and invoice, there was a declaration by the assessee that the goods were intended either for "re-export" as ship's stores and/or for supply to dipl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the property in the goods passed only after the goods passed the customs frontier and that the property did not pass in the territory of Tamil Nadu. It was further contended that the sales were in the course of export because they were to be on the board of the ship, which ultimately moved out of the Madras Harbour. The assessing authority did not accept the assessee's submission and held that the goods were taxable under the Tamil Nadu General Sales Tax Act, 1959. The appeals of the assessee to the Appellate Assistant Commissioner were unsuccessful. On further appeals, the Tribunal dismissed the appeals. The order of the Tribunal is the subject of the present revision proceedings. The learned counsel for the revision petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int that is sought to be argued on behalf of the assessee is that this is a case where the sale occasions the movement of goods from one State to another. The postulate behind the argument is that the territorial waters being outside the State will have to be treated as the Union Territory. When the goods moved from this State to the territorial waters, it will be, according to the assessee's counsel, a case coming within the scope of section 3(a). In order to establish this proposition that the sale occasions the movement of goods, it is necessary for the assessee to show that there was movement of the goods from one State to another under the contract. This is a case where, as already seen, the Master of the ship or the other officers wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted as State of Madras v. Davar Co. [1969] 24 S.T.C. 481 (S.C.). Though this court's decision was reversed, it was on another point and this part of the decision was not the subject of discussion. We do not, however, think it necessary to go further into the point as to whether the territory covered by the territorial waters forms part of the State of Madras or not for the purpose of the present case, as even on the view that the territorial waters do not form part of the State, there is nothing to show that this is a case of inter-State sale. The sale in the present case appears to us to be a local sale in view of the specific provision of section 4(2)(b) of the Central Sales Tax Act read with section 2(n), explanation (3), of the Tam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t section to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States. Clause (2) of section 4, which is material for our present purpose, runs as follows: "4. (2) A sale or purchase of goods shall be deemed to take place inside a State if the goods are within the State- (a) in the case of specific or ascertained goods, at the time the contract of sale is made; and (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation." It is unnecessary to extract the explanation appended to section 4(2), as it is not relevant for our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Act specifically incorporated the provisions of section 4(2) therein. It, therefore, follows that the present sales are taxable under the Tamil Nadu General Sales Tax Act. In these circumstances, the assessment in question cannot be considered to be wrong in any manner. The learned counsel for the assessee quite fairly brought to our notice a decision of the Andhra Pradesh High Court in the assessee's own case reported in Fairmacs Trading Company v. State of Andhra Pradesh [1975] 36 S.T.C. 260. In that case also, the assessee had made similar supplies of bonded goods to the ships in the Vizag Harbour. The question was whether they could be brought to tax under the Andhra Pradesh General Sales Tax Act, 1957. The Andhra Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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