TMI Blog1961 (6) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... e the contract was concluded at Kozhikode and rail delivery was effected at Kallai yard within the State, the sales were intra-State and the turnover taxable. On appeal the Appellate Assistant Commissioner had also declined to exempt the amount, and the Appellate Tribunal has dismissed the appeal relying on its previous decision in Tribunal Appeal No. 168/57. The ground is that the sale under the contract had become complete at Kallai, within the State of Kerala, where the sleepers were loaded into wagons. Thereafter this petition has been filed and the following question has been framed for our decision: "Whether the turnover of Rs. 1,34,115-15-1 referred in the order of the Sales Tax Appellate Tribunal represents the proceeds of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment to have such sleepers re-inspected at any time within 2 months after they have been passed." "20. If there be any shortage in the number of sleepers received by the consignee in any particular consignment, i.e., consignment covered by a single railway receipt, the contractor shall be paid only for the number of sleepers actually delivered at destination; provided all sleepers received by the consignee are passed sleepers and have not been rejected by the passing officer but if any part of such consignment consists of unpassed sleepers they shall be dealt with in accordance with clause 21." "23. Ninety per cent. of the value of sleepers loaded on trucks under clause 17 or 19 will be paid on production of the railway traffic receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rkar[1960] 11 S.T.C. 651, where the majority has held that the sales would be inter-State sales, should the agreement occasion them. The last case is conceded to be under the Central Sales Tax Act; but it is urged that the pronouncement of the Supreme Court on what constitutes inter-State sales would be safe guide for deciding what would be sales in the course of inter-State trade. The learned Government Pleader has, on the other hand argued that for claiming exemption under Article 286(2), the sales must form part of the channel, which constitutes inter-State trade, and where the delivery to the purchaser concludes the transfer of ownership within the State, in which the contract has been entered, the sales ceases to be part of the commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard Wagon Co., Ltd. v. Commercial Tax Officer[1960] 11 S.T.C. 47. We feel the correct legal position to be between the two arguments. It is clear that Parliament had not enacted in the Central Sales Tax Act something different to what courts had earlier found to be the meaning of the movement of goods between inter-States being free. It further follows that what the Supreme Court has held to be inter-State sales for purposes of the Central Sales Tax Act would be a safe guide for determining what is part of interState commerce, and thus exempted under Article 286(2). Therefore, the test applied in the majority judgment of Tata Iron and Steel Co.'s case[1960] 11 S.T.C. 655. for sale being inter-State, may safely be adopted for deciding whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r clause (23) were not in anticipation of ownership passing later. The title therefore, passed with the delivery of sleepers at railway stations within Kerala State, and the later movement is for the better enjoyment of the goods, in which title had already been acquired. In other words, the agreement does not put the sleepers into the channel of inter-State trade, but the journey is started after the goods have been delivered and largely paid. In these Circumstances, the correct description of the position is that the later movement is carriage of goods by the buyers for their better enjoyment. It was argued that the right of rejection at the outside destination, with the risk of losses during the journey on the petitioner, distinguishes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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