TMI Blog1976 (7) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract in question require to be mentioned. One condition is that supplies were subject to inspection and acceptance by the consignee. The second condition is that the supplies were to be effected promptly and satisfactorily from the stocks held at the petitioner's Madras factory and also from the petitioner's depot at Vijayawada. In this case for the year relevant to the assessment year 1965-66, the petitioner had supplied pesticides to the officers of the Andhra Pradesh Government pursuant to the agreement referred to above, whose turnover is Rs. 1,54,838.49. The petitioner contended that this turnover represented local sales effected in Andhra Pradesh and that, therefore, it was not liable to be taxed. However, the Deputy Commercial Tax Officer treated the turnover as turnover of sales effected in the course of inter-State trade and, therefore, assessed the same under section 6 of the Central Sales Tax Act, 1956. The appeals preferred by the petitioner to the Appellate Assistant Commissioner of Commercial Taxes and the Sales Tax Appellate Tribunal, Madras Bench, failed. It is thereafter that the petitioner has approached this court by way of revision against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of this case, is as follows: "3. A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another." Consequently, the movement of goods from one State to another having been admitted in the present case, the question for consideration is whether that movement was occasioned by the sales in question or not. The learned counsel for the petitioner drew our attention to certain decisions in this behalf. The first decision which the learned counsel relied on is a decision of the Supreme Court in Tata Iron and Steel Co. Limited, Bombay v. S. R. Sarkar[1960] 11 S.T.C. 655 (S.C.). In that case, the Supreme Court was concerned with the question as to whether the sales involved therein were sales coming within the scope of clause (a) of section 3 of the Central Sales Tax Act, 1956, or not. Dealing with that question, the Supreme Court stated: "By section 3, a sale or purchase of goods is deemed to take place in the course of inter-State trade or commerce if the sale or purchase (a) occasions the movement of goods from one State to another, or (b) is effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the petitioner's depot at Vijayawada, Consequently, it can be certainly stated that the contract entered into by the petitioner with the Government of Andhra Pradesh contained a covenant that the goods must be supplied from the petitioner's Madras factory and the argument of the learned counsel for the petitioner overlooks this specific provision contained in the agreement. Even if such a stipulation had not been present in the agreement, once the petitioner moved the goods from its Madras factory by virtue of the indents placed by the officers of the Agriculture Department of Andhra Pradesh, certainly the movement would have been the result of an incident of the contract of sale. Therefore, the decision of the Supreme Court relied on by the learned counsel for the petitioner is not of any assistance whatever to support his case, but, on the other hand, is against this contention. The learned counsel for the petitioner then relied on another decision of the Supreme Court in Balabhagas Hulaschand v. State of Orissa[1976] 37 S.T.C. 207 at 214 (S.C.); A.I.R. 1976 S.C. 1016 at 1021., wherein the Supreme Court observed: "Furthermore, we can hardly conceive of any case where a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. II, as pointed out by the Supreme Court, deals with a case where goods are taken delivery of in the other State by the seller himself and thereafter he sells the goods to the buyers there. But, in this case, apart from the fact that the petitioner herein booked the goods to "self", as we have pointed out already, there is no evidence to show that the goods were taken delivery of by the staff or agent of the petitioner at Guntur and thereafter the said agent or staff of the petitioner sold the goods to the various officers of the Andhra Pradesh Government. We may also point out one fact which is relevant, namely, that the goods were consigned to a place in Andhra Pradesh nearest to the place where the offices of the indenting officers are situate and that is the reason why the Appellate Assistant Commissioner of Commercial Taxes as well as the Sales Tax Appellate Tribunal pointed out that the goods were consigned to the officers who indented for the same. Consequently, the decision referred to above is not of any assistance whatever to the case of the petitioner. As a matter of fact, the Supreme Court in the very same judgment laid down the following proposition of law as conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he movement of the goods was under a covenant or an incident of the contract of sale, all these sales fell within section 3(1) and were sales in the course of inter-State trade or commerce." The High Court also pointed out that it was immaterial that the buyers could reject the goods at the place of destination or at the port if the petitioner-company in that case did not despatch the component ores in such proportion as to make up the mixture of contracted grade, for section 4(1) did not refer to unconditional appropriation or passing of property. The Supreme Court, after referring to its earlier decision in Balabhagas Hulaschand v. State of Orissa[1976] 37 S.T.C. 207 (S.C.); A.I.R. 1976 S.C. 1016., referred to already, affirmed this judgment of the High Court of Madhya Pradesh. It would appear that, before the Supreme Court in that case, a contention was advanced as was advanced before us that till the goods were inspected and accepted by the indenting officers, the property in the goods did not pass, that till that stage they continued to remain as unascertained goods and that, therefore, the sales could not be said to be sales in the course of inter-State trade or commerce. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.). has no relevancy to the facts of the present case. That case did not deal with any sales in the course of inter-State trade or commerce and it was concerned with the question as to where the property in the goods really passed and, in that context, a reference was made to sections 18, 23, 33 and 39 of the Sale of Goods Act. In that case also, there was a stipulation in the contract that the buyer had a right to inspect the goods and reject the same. With reference to that provision, the Supreme Court pointed out that the property in the goods did not pass from the seller to the buyer until the buyer had inspected the goods and accepted the same. As we have pointed out already, that will have no relevancy to the determination of the question as to whether the sales in the present case constituted sales in the course of inter-State trade or commerce or not, as defined in clause (a) of section 3 of the Central Sales Tax Act, 1956. So also the decision of the Supreme Court in Tata Engineering and Locomotive Co. Ltd. v. Assistant Commissioner of Commercial Taxes, Jamshedpur [1970] 26 S.T.C. 354 (S.C.). is of no assistance to the case of the petitioner in the present case. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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