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TMI Blog1960 (3) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ent spread all over India except in the State of Mysore at the relevant period. The first petitioners have a branch office at Bangalore in the State of Mysore and are registered as a dealer under the Mysore Sales Tax Act. The petitioners supplied cement to the members of the public and also to the Director-General of Supplies and Disposals, Government of India, New Delhi, or to such persons authorised by the said office for consumption within the State of Mysore during the year 1955-56 commencing from 1st of April, 1955, and ending with 31st March, 1956. The total turnover of such sales of cement within the State of Mysore as determined by the Sales Tax Officer was Rs. 44,21,226-6-2 and the same is based on the return submitted by the first petitioners. Having submitted a final return of taxable turnover for the period referred to above to the Sales Tax Officer the first petitioners urged that no tax was payable on the said turnover as the sales did not fall within the purview of the Mysore Sales Tax Act being inter-State transactions and the supplies to the Director-General of Supplies and Disposals, Government of India, New Delhi, were done in the course of inter-State trade and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment of India, New Delhi, are not liable to be taxed though the cement so sold has been consumed within the territories of Mysore as all of them come within the ban of Article 286 of the Constitution. Sri M.K. Srinivasa Iyengar, the learned counsel for the petitioners fairly conceded at the time of arguments that he cannot reasonably challenge the levy of sales tax on all the transactions from 1st April, 1955 to 6th September, 1955, in view of the promulgation of the Ordinance (sic.) known as Sales Tax Laws Validation Act passed by the Parliament which validated the levy or collection of taxes levied or collected between certain period irrespective of the fact that the sales had taken place in the course of inter-State trade or commerce and also in view of the decision of the Supreme Court in Sundararamier & Co. v. The State of Andhra Pradesh. (1958) A.I.R. 1958 S.C. 468; 9 S.T.C. 298. But he challenged the legality of the levy of sales tax on all the transactions from 7th September, 1955, to 31st March, 1956. It was contended by Sri Srinivasa Iyengar that all the transactions relating to the sale of cement to the public from 7th September, 1955, to 31st March, 1956, are in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951. (3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." Section 27 of the Mysore Sales Tax Act, 1948, reads as follows: "Notwithstanding anything contained in this Act- (a) a tax on the sale or purchase of goods shall not be imposed under this Act, (i) where such sale or purchase takes place outside the State of Mysore; or (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territories of India; (b) a tax on the sale or purchase of any goods shall not be imposed where such sale or purchase takes place in the course of inter-State trade or commerce except in so far as Parliament may by law otherwise provide. Explanation.-For the purposes of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second petitioners and the goods are despatched to the buyer it should be deemed that the delivery was effected outside the State and, therefore, the transactions are in the nature of inter-State transactions and cannot, therefore, be subjected to any levy of sales tax by the State of Mysore. The point whether a delivery to a carrier amounts to a delivery to the purchaser as contemplated in Article 286(1)(a) of the Constitution of India was considered by their Lordships of the Supreme Court in Bengal Immunity Co. Ltd. v. State of Bihar and Others[1955] 6 S.T.C. 446; A.I.R. 1955 S.C. 661. His Lordship Venkatarama Ayyar, J., in the course of his judgment repelled an argument similar to the one that is advanced before us with the following observations: "It was then contended that the sales proposed to be taxed did not take place in Bihar as the goods were actually delivered as contemplated by the explanation not there but in Bengal. The argument is that the words 'actual delivery' in the explanation are used in contrast to constructive or symbolic delivery as meaning physical delivery of goods, that under section 39(1) of the Sale of Goods Act, 1930 (Act III of 1930) the common car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is treated as delivery to the purchaser, there is delivery in fact and in its popular sense only when the purchaser obtains possession of the goods and it is this that is connoted by the words 'actual delivery'. When section 51(1) refers to delivery to buyer or his agent, it refers to actual delivery, and delivery to common carrier is regarded as constructive, having regard to section 39(1). The section, it will be noticed, proceeds on the footing that a common carrier is not the agent of the buyer with reference to actual delivery. He is the agent of the purchaser for transmission of the goods to him." His Lordship concluded his judgment on this point in the following words: "It must accordingly be held that the expression 'actual delivery' in the explanation to Article 286(1)(a) means delivery of the goods to the purchaser or his agent, and delivery to the common carrier is not actual delivery, and that, in this case, the goods were actually delivered not in Bengal when they were delivered to the common carrier but in Bihar when they were delivered to the purchaser. This contention of the appellant must also be rejected." As already stated, it is undisputed that the delivery of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector-General of Supplies and Disposals, Government of India, New Delhi, or to his authorised agent within the State of Mysore. Similarly it is not disputed that the entire quantity of cement so supplied was actually utilised for works within the State of Mysore. I am, therefore, of the opinion that the sales took place within the State of Mysore. The mere fact that one of the terms of the contract was that the cement was to be supplied F.O.R. ex-works or that the seller has not taken any risks so far as loss during transit and that the responsibility for loss was fixed on the railway authority does not, in my opinion, change the characteristics of the transactions and make them transactions in the course of inter-State trade or commerce so long as the sale was concluded within the State of Mysore and the goods were actually delivered to the purchaser within the State of Mysore. I am clearly of the opinion that the transactions relating to the supply of cement to the supply department do not come within the prohibition of Article 286(2) of the Constitution or section 27 of the Mysore Sales Tax Act. The second contention of Sri Srinivasa Iyengar must, therefore, fail. No other poi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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