9911796707
TMI Blog1954 (2) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Sales Tax, Bhagalpur Division, in revision. The revision petition filed on 30th November, 1950, is enclosed-Exhibit D. The learned Commissioner after hearing the parties dismissed the petition by his order dated the 6th February, 1951-Exhibit E. Being dissatisfied with the above order of the Commissioner of the Bhagalpur Division, the assessee came up in 2nd revision before the Board of Revenue, Bihar. The revision petition filed before the Board on 5th July, 1951, is enclosed-Exhibit F. The Board, after hearing the parties, rejected the revision petition with the modification that deduction on account of the price of timber despatched to head office at Calcutta should be allowed. Board's order dated 6th September, 1951, is enclosed-Exhibit G. The assessee then filed on 5th December, 1951, a petition for re- ference to the High Court on the following point of law: "Whether in the facts and circumstances of the case and in view of the provisions of 11(g) of the contract of the railway is it lawful to hold that delivery of goods to the purchaser was completed within Bihar and not at the destination of the consignee when the property in goods was intended to pass to the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered office at Calcutta. The company has taken lease of timber forest in Nepal and has built godowns and offices in Nepal territory close to the Jogbani railway station in Bihar State. The company manufactures timber sleepers, squares, logs etc., at their workshop. The company has taken a big railway contract and the bulk of the timber manufactured by it is sup- plied to the railways and despatched to different destinations from Jogbani railway station after obtaining instructions from the Sleepers Control Office. For the period from 1st of July, 1947, to 31st of March, 1948, the Sales Tax Officer determined the taxable turnover to be Rs. 4,50,061 and imposed sales tax amounting to Rs. 7,032-3-0. The objection of the company was that no sale took place in Bihar since the wooden sleepers were manufactured in Nepal and despatched from Jog- bani railway station to places outside the Bihar State. It was conceded on the part of the assessee that the goods were stored in its godown at Jogbani so long as wagons were not available. But the contention of the assessee was that the sale did not take place in Bihar and there was no liability to pay sales tax. The objection was overruled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposal, he is deemed to have unconditionally appropriated the goods to the contract." The question therefore arises whether the goods were unconditionally appropriated to the contract at Jogbani railway station, either by the seller with the assent of the buyer or by the buyer with the assent of the seller. The question must be determined upon a consideration of the relevant clauses in the written contract between the parties dated 10th of August, 1948. Paragraph 4 of this contract states that the President, Eastern Group Sleeper Control, would authorise a person, called Sleeper Passing Officer, to inspect, pass and brand sleepers which satisfy the con- ditions stipulated under the contract. Paragraph 5(a) states that the sleepers shall be offered for examination and passing within the bounda- ries of the railway stations mentioned in the Schedule. Schedule IV annex- ed to the contract specifically states that sleepers would be offered at Jogbani railway station. Paragraph 5(b) gives details as to the manner in which the sleepers should be offered for inspection by the contractor. Paragraph 5(f) states that after the branding of passed sleepers the con- tractor or his agent shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule." Schedule IV states that the sleepers of the description in column 1 of the Schedule should be delivered at Jogbani railway station which is mentioned in column 2. The date of the completion of the contract as stated in column 5 is 31st of March, 1949. Upon a consideration of all these pro- visions of the contract it is manifest that the goods in question were un- conditionally appropriated to the contract at Jogbani railway station. The Sleeper Passing Officer had under the terms of the contract the right to inspect, pass and brand the sleepers at Jogbani railway station. The sleepers were offered for inspection at Jogbani railway station and the Sleeper Passing Officer inspected the sleepers and put his brand on the passed sleepers in the presence of the contractor, who also put a dot of white paint on each passed sleeper near the Sleeper Passing Officer's brand. As soon as the sleepers were passed and branded by the Sleeper Passing Officer at Jogbani, there was, in my opinion, a legal appro- priation to the contract on the part of the buyer within the meaning of Section 23(1) of the Sale of Goods Act. The principle is very clearly stated by Lord Blackburn: "The general r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the goods in the railway wagons at Jogbani and despatched the consign- ments to the various destinations. Paragraph 11(g) of the contract states that such sleepers as are acknowledged by the consignee as possessing the passing mark of the Sleeper Passing Officer and the private mark of the contractor would be deemed to be fully delivered. It is also clear from the terms of the contract that the petitioner delivered the goods to the (1) 2 Coke 36. (2) (1827) 6 B. & C. 388. buyer at Jogbani railway station without reserving the right of disposal. Paragraph 4 states that the Sleeper Passing Officer shall be deemed to be an agent of and acting on behalf of the State and paragraph 11(g) states that such sleepers as possess the passing mark of the Sleeper Passing Officer and the private mark of the contractor shall be deemed to be fully deliver- ed. There is nothing to suggest from the terms of the contract that the contractor reserved the jus dispossendi. Upon the construction of the terms of the contract I am of opinion that there was delivery to the carrier at Jogbani railway station and there was an unconditional appro- priation of the goods also within the meaning of Section 23( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l relied upon Section 2(g) of the Act (Bihar Act XIX of 1947) which states: "'Sale' means, with all its gram- matical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, in- cluding a transfer of property in goods involved in the execution of con- tract but does not include a mortgage, hypothecation, charge or pledge: Provided that a transfer of goods on hire-purchase or other instalment system of payment shall, notwithstanding the fact that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale: Provided further that notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930, the sale of any goods which are actually in Bihar at the time when in respect thereof, the contract of sale as defined in Section 4 of the Act is made, shall, wherever the said contract of sale is made, be deemed for the purposes of this Act to have taken place in Bihar". Counsel referred in particular to the second pro- viso which enacts that the sale of goods which are actually in Bihar at the time of the contract of sale shall be deemed to have taken place in Bih ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the two pro- visos to Section 2(g) of the Act. If there is a transfer of property within the Bihar State the transaction of sale would be taxable under the provisions of the Act and it is not necessary that the goods should have been within the territorial limits of Bihar at the time the contract of sale was effected between the parties. Mr. B.C. Ghosh referred in support of his argument to two Supreme Court decisions, The State of Bombay v. The United Motors (India) Ltd.(1) and Poppatlal Shah v. The State of Madras(2), but neither of these authorities has any relevance to the question raised in the present case. The argument of Mr. B.C. Ghosh on this aspect of the case must fail. I next turn to the argument put forward on behalf of the assessee that the transaction in the present case is tantamount to a delivery of goods on approval or on "sale or return" within the meaning of Section 24 of the Indian Sale of Goods Act. Counsel referred on this point to paragraph 11(g) of the contract, according to which the con- signee at destination has a right of re-inspection of the sleepers by the Sleeper Control Officer and all sleepers rejected by the Sleeper Control Officer at dest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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