9911796707
TMI Blog1977 (2) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... e customers found the machines sold to them to be defective, and these defective machines were returned by the applicants to the manufacturers, the said George Salter India Limited. These machines were returned between 21st September, 1966, and 30th December, 1966. The accounting period of the applicants was the calendar year, and at the end of this accounting period for 1966, the applicants made a journal entry debiting the said George Salter India Limited with the value of the machines so returned and crediting it to the purchase account. The description given in the said journal entry was "being the value of unsalable machines returned to supplier". In the applicants' assessment for the assessment year 1st January, 1966, to 31st December, 1966, the Sales Tax Officer considered the return of the said defective machines to be sales made by the applicants to the said George Salter India Limited, and since the said manufacturers were in West Bengal he treated them as sales made in the course of inter-State trade and commerce. He, therefore, added a sum of Rs. 86,715 to the turnover of sales of the applicants and then deducted the said sum of Rs. 86,715 from the total turnover so ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal also dismissed the applicants' said second appeals on the same ground. In doing so, it followed its previous judgment in Revision Application No. 324 of .1966-Rhythm House Private Limited v. State of Maharashtra-decided on 13th December, 1966. We find that the reliance placed by the revenue authorities and the Tribunal on the said rule 4 and the said clause (36) of section 2 was entirely misplaced for two reasons. The first is that the question for decision was whether these were inter-State sales. That question had to be decided by reference to the definition of "sale" given in the Central Sales Tax Act, 1956, and not by reference to the Bombay Sales Tax Act, 1959. It may, however, be mentioned that at the relevant time under rule 11(2) of the Central Sales Tax (Registration and Turnover) Rules, 1957, the sale price of all goods returned to the dealer by the purchaser of such goods within a period of six months from the date of delivery of the goods was, inter alia, to be deducted in determining the taxable turnover of a dealer for the purposes of the said Central Act. By the Amending Act 28 of 1969, section 8A was inserted in the Central Act with retrospective effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goods Act, 1930, the property in the goods had passed to the applicants, and when the applicants returned the said goods to the said George Salter India Limited there was a resale by them to the said manufacturers. In support of this submission, Mr. Andhyarujina relied upon sections 41 and 42 of the Sale of Goods Act. Under sub-section (1) of section 41, where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract. Sub-section (2) of that section provides that unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract. Section 42 of the Sale of Goods Act deals with the question of acceptance. It provides as follows: "42. Acceptance.The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Turnover) Rules, 1957, that is, they were purchased by them for the purposes of resale. The applicants in their turn sold these goods to their own customers. From the record we find that whenever goods were sold to customers, a guarantee from the said George Salter India Limited was given to them which, inter alia, contained an undertaking by the said manufacturers to replace or repair free of charge any part of the machine which within one year from the date of purchase could be shown to have failed through defective material or faulty workmanship, provided a claim was made to the nearest service station or dealer of the said George Salter India Limited within the period of the said guarantee and such goods were returned to the said manufacturers at their factory freight paid. The Tribunal has, however, erroneously construed this guarantee as a guarantee given by the said George Salter India Limited to the applicants. The very wording of that guarantee negatives any such conclusion. It is a guarantee given not to a distributor or a stockist or a middleman but to the ultimate purchaser of the goods in question. It is also obvious that when goods were supplied from Titaghar in Wes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
