TMI Blog1988 (5) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... This is an appeal against the common judgment of a Division Bench of the High Court of Judicature at Madras in Tax Cases Nos. 2 3 of 1970. The appeal has been preferred pursuant to special leave granted by this Court under Article 136 of the Constitution of India. The facts giving rise to the appeal are as follows: The Dharangadhara Chemical Works Ltd. is a manufacturer of Caustic Soda and certain other chemicals. Dharangadhara Chemicals Works Ltd. (referred to hereinafter as "the Chemical Company") entered into an agreement dated 9th August, 1957 under which it agreed to sell all its products to Dharangadhara Trading Co. Pvt. Ltd. (referred hereinafter as "the Trading Company"). Under clause 1 of the said agreement, the Chemical Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoices were handed over to the Trading Co. by the Chemical Co. It may be mentioned that the actual quantities sold, the sale price, the booking station and the destination stations were not determined under the aforesaid agreement of 9th August, 1957, but in the actual contracts of sale in respect of definite or specified quantities. The mode in which sales were made was that the Trading Co. obtained orders from out of State buyers and entered into agreement of purchase with the Chemical Co. for these specified quanities. All the goods sold under these contracts of sale were booked at the aforesaid railway station in Tamil Nadu to the various places outside the State of Tamil Nadu where buyers from the Trading Co. required the goods and af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd invoices only after the inter-state journey of the goods had commenced. These contentions were rejected by the Appellate Assistant Commissioner, who dismissed the appeals. Both the assessees filed appeals against the decisions of the Appellate Assistant Commissioner to the Tribunal. The Tribunal allowed both the appeals. The Tribunal pointed out that there were two sets of sales, the second set of sales by the Trading Co. to out of State buyers was admittedly inter-state in character. The Trading Co. had filed necessary `E-1' forms and 'C' forms in these cases and the transactions, therefore, fell within the scope of Section 6(2)(B) of the Central Sales Tax Act and were exempt from tax under local Sales Tax Act as well as the Central S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and the manner in which the actual sales were made by the Chemical Co. to the Trading Co. For ascertaining these terms, the Tribunal examined some of the subsequent orders placed by that Trading Co. on the Chemical Co. Taking into account all these, the Tribunal found that as the orders were placed for booking, specified goods to out of station buyers, and the Chemical Co. never give physical delivery of the goods to the Trading Co., but booked the goods to the destinations as required by the out of state buyers and merely handed over documents of title to the Trading Co. It was clear that the movement of the goods from the State of Tamil Nadu to the outside States was occasioned by the terms of the contract themselves and the sales were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s merely a general agreement and the actual terms of the contracts of sales as well as the instructions of the out of state buyers have to be taken into account in determining the nature of the sales in question. In view of this, the conclusions arrived at by the Tribunal as well as the High Court that the sales by the Chemical Co. to the Trading Co. were inter-state sales cannot be faulted and the learned counsel for the appellant has not advanced a single reason showing how that conclusion is incorrect. In fact, this conclusion finds some support from the observations of this Court in Union of India Anr. v. K. G. Khosla Co. (P) Ltd. Ors., [1979] 3 S.C.R. 453 at p. 460. In the result, we find that there is no merit in the appeal an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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