9911796707
TMI Blog1968 (8) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1956, claiming that for the assessment year 1961-62 there has been an escapement of assessment in so far as sales in the course of inter-State trade and commerce of the company was concerned and proposed to determine such escaped turnover under inter-State sales which, according to the first respondent, amounted to Rs. 30,00,000 and proposed that a 10 per cent. levy of tax is exigible in relation to such escapement under section 8(2) of the Central Sales Tax Act, 1956, as no declaration in Form 'C' was filed before him. The petitioner objected to such reopening both factually and legally. Overruling the objection the impugned order of assessment was made. The petitioner's contention was that the alleged escapement related to intra-State sales of cement in Calcutta and the same was assessed and brought to tax under the West Bengal Sales Tax Act. The petitioner states that during the relevant period the Cement Control Order, 1958, was in force, which legally obliged the State Trading Corporation of India Limited to acquire the entire production of cement at the various factories in India including the Dalmiapuram factory of Dalmia Cement (Bharat) Limited. Under the Cement Contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilway Station to which cement is to be booked Remarks 1 2 3 4 5 The Cement Distributors (P.) Ltd., "Stephen House", Mission Road, Calcutta. Dalmiapuram Factory Allotment for the period IV/1961 9,000 Metric tonnes (Ninethousand tonnes only)for distribution to Calcutta area as directed by the Regional Cement Officer, S.T.C., Calcutta. Full details of the purpose for which and the For consumption in place at which cement will actually be consumed. Calcutta area. Reference:- i. Ministry of C. & J., New Delhi, No. Cem10(1 0)161 dt. 26-9-196 1. ii. iii. For The State Trading Corporation of India Ltd. Sd/-Regional Cement Officer. Copy to:- 1. The person named in Col. 1. (By Registered Post) The authorisation enables the petitioner to sell the quantity of cement mentioned therein to the person in whose favour the authorisation is issued. It is said that such a sale will be deemed to be a direct sale between the petitioner and the purchaser. It is however significant that the name of the purchaser is not to be found in this authorisation. On the other hand, the person in whose favour the authorisation is issued is none else than the branch office of the petitioner. Before is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Calcutta office of the petitioner has been used in the case of the allotment letter authorising the Executive Engineer to secure the supplies needed by him. Here also, the expression used is that the sale will be a direct deal between the branch office of the petitioner-company at Calcutta and the purchaser. One significant recital in this letter of authorisation or allotment is that the delivery of such cement is to be ex-Calcutta jetty/Docks. The common feature in both the authorisations referred to is that it related to the allotment period IV/61. Thus, 9,000 tonnes were to be sent by the petitioner to its branch office at Calcutta as per the first authorisation cited above and the branch office at Calcutta which is apparently expected to take delivery of the same, is to ascertain and apportion the quantities of cement required by the respective purchasers and as allotted to them by the State Trading Corporation of India Limited in the manner narrated above, and deliver such apportioned goods at the Calcutta Jetty/ Docks to the named purchaser. It happened in this case that during the year 1960-61 similar instructions for transfer had been given, out of which the transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany despatched the allotted quantity of cement to the respective allottees in Calcutta by rail. In so far as the transactions in question are concerned, they were all the subject-matter of bulk shipments from Cuddalore Port to Calcutta Port and the goods allotted to the ultimate buyer, whoever it may be, was ascertained and separated from the bulk so shipped and after such ascertainment the goods were delivered to the buyer at Calcutta at jetty or Docks as the case may be. In the light of such facts as disclosed before us, though not before the assessing authority, it is necessary to find what really the parties said, wrote and did. As almost all contracts are executory in scope, the terms thereof can be discovered only in relation to the manifest intention of the parties connected with the contract. No doubt if correspondence led to a contract, a delve into the same is obviously necessitated to find out the common intention of the parties and the nature and content of the legal obligations undertaken or communicated as between them expressly or by necessary implication. Ordinarily a contract emanates from a volition between two parties called the seller and buyer. There may howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State- (a) in the case of specific or ascertained goods, at the time the contract of sale is made; and (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation." To a great extent, the sale of unascertained goods, in the case of inter-State sales involving inter-State movement, has been placed in pari materia for certain purposes with a sale of such unspecified goods under the appropriate provision of the Sale of Goods Act. Whereas section 3 of the Central Sales Tax Act makes a sale of ascertained goods exigible to tax by the despatching State by reason of the movement of the goods having been occasioned under the contract, in the case of unascertained goods the despatching State has no jurisdiction to treat it and tax it as an inter-State sale merely because a movement is involved. In the latter case the situs of sale is determined on the basis of the appropriation of the goods by an overt act on the part of the seller, with or without the assent of the buyer. Thus if the goods are unascertained, then until it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be difficulty in ascertaining the place where the sale is effected, has also no force. In any event, section 4(2) may not be denied its full operation, merely because difficulty may be encountered in some cases in ascertaining the place where it is effected by the application of the rules set out therein." The following excerpts from Larsen and Toubro Limited v. Joint Commercial Tax Officer[1967] 20 S.T.C. 150 at 185-186. to which my very learned brother Veeraswami, J., was a party, are apposite to the discussion: "...no concept of inter-State trade can be comprehensive without knowing what is an outside sale and, therefore, an inside sale. An inside sale or an outside sale is related to its situs and if the situs of an inside sale is fixed on certain tests, what is not an inside sale will be an outside sale provided there is a completed contract of sale of goods. Section 4(2) defines an inside sale in terms of certain tests for its situs. A sale or purchase of goods is deemed to take place inside a State in the case of specific or ascertained goods at the time the contract of sale is made; and in the case of unascertained or future goods at the time of their appropriation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide to fix the situs for jurisdiction to make such sales exigible to tax. As pointed out by the learned Judges in Larsen and Toubro Limited v. Joint Commercial Tax Officer[1967] 20 S.T.C. 150 at 186. : "Once the tests under section 4(2) are answered in favour of a State, that becomes the appropriate State having jurisdiction to tax the sale or purchase and no other State will have the power to tax the same transaction." Learned counsel for the State, however, relied upon two decisions of the Supreme Court in support of his contention that the sales in question are exigible to tax as inter-State sales. He referred to The Cement Marketing Company of India (Private) Limited v. The State of Mysore[1963] 14 S.T.C. 175. and The State Trading Corporation of India Limited v. The State of Mysore: No. 2[1963] 14 S.T.C. 416.. There the Supreme Court was not concerned with the sale of unascertained goods. It was a clear case where both the identity of the buyer and the goods were available. The goods were sent by rail and the consignment so sent was intended to the allottee. There was no question of any appropriation of the goods to the contract of sale by the. seller or by the buyer. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 5(7) of the Central Sales Tax (Madras) Rules was raised, but it was not pursued. The argument, however, ultimately rested on facts. The contention was that, conceding that the authority had the power to revise the assessment within a period of five years, such period having expired on 31st March, 1967, and no assessment in fact having been made by then, the present order which according to the petitioner was passed on 5th April, 1967, is without jurisdiction and is unenforceable. He has invited our attention to the order served on the petitioner by the authority. It is very unfortunate for us to comment that in this case there is considerable doubt on the face of the order whether it was signed on 31st March, 1967, at all. We find distinctly that the final order was signed by the Deputy Commercial Tax Officer, Lalgudi, on 5th April, 1967. Surprisingly enough, however, when the notice of final assessment and demand under rule 5(6) of the Central Sales Tax (Madras) Rules, 1957, was issued to the petitioner, the Deputy Commercial Tax Officer has strained himself to date the order as 31st March, 1967. A casual perusal of the notice issued in Form 3 as above discloses that a corre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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