9911796707
TMI Blog1960 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... hand Ram Sahai at Kanpur. The latter secure orders from different parties, who are called "buyers". They have a standard form of agreement for regulating their relations inter se the "buyers", which has been produced by learned Advocate. These "buyers" then enter into other transactions of resale, and according to the instructions of the "buyers", the petitioner-company despatches the goods to various destinations. The point of attack is in regard to consignments aggregating in value to a sum of Rs. 4.08 lacs delivered in Bihar as a result of the instructions from the "buyers" on which it is claimed no sales tax is assessable, since they are not, what may be conveniently called "explanation sales", i.e., sales within the meaning of the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same footing, and their delivery is as a direct result not of the first sale with the "buyers", but of subsequent sale or sales made by them, and as such they do not come within the scope of the definition of "explanation sales", and as such are exempt from the levy of sales tax. 3.. Certain points are admitted on behalf of the petitioner, and these may be stated. It is admitted that the actual delivery in regard to all these consignments was in Bihar. It is also admitted that in regard to all these consignments, in the railway receipts the consignor is noted as the petitioner, the consignee being "self". 4.. The contention that, in order to bring such sales within the ambit of the explanation to clause (g) of section 2 of the Act, not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standard contract form produced on behalf of the petitioner is both instructive and revealing. According to the arrangements between the petitioner-company and their " buyer ", the petitioner is required to despatch to the "buyer" or according to his instructions. It may be that before giving his instructions to the seller, the "buyer" has to enter into one or more transactions, in order to fix the destination of the goods, but nevertheless, when he does give the despatch instructions, it is with reference to, and under the terms of his agreement with the seller, and therefore, the despatch instructions are directly referable to the latter. The original transaction is not interrupted, but is a continuing transaction, and is concluded only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine the contract at the risk of the "buyer". Under paragraph 16, it is the "buyer" that is to be charged additional excise duty in the event of it being levied, and similarly, he is also to get the advantage of any drawback. Under paragraph 17, it is the original "buyer" (not the ultimate buyer) that is entitled to make complaints with regard to the quality of the goods sold. All these clearly establish that there is no privity of contract at all between the seller and the ultimate buyer. It is the original contract with the buyer that originates the movement of the goods. It may be that, before giving his despatch instructions, the original "buyer" enters into one or more transactions in order to fix the destination of the movement, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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