TMI Blog1984 (7) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act and that the transaction cannot be treated as inter-State sales as has been done by the authorities below. The Tribunal, after referring to the terms of the contract entered into between the assessee and the Imperial Textile Waste Company, Madras, has taken the view that since the said contract contemplates movement of the goods outside the State, the sales by the assessee to the Imperial Textile Waste Company, Madras, should be taken to be inter-State sales. The said view of the Tribunal has been challenged in this case. According to the petitioner, the Tribunal is not right in treating the entire turnover of Rs. 3,11,400 as relating to inter-State sales, while in fact the said turnover represents only local sales. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on waste to M/s. Pondicherry Papers Limited, Pondicherry. The assessee despatched the goods to Pondicherry Papers Ltd., Pondicherry, as per the instructions of the buyer, the Imperial Textile Waste Company, Madras. The assessee had raised invoices on the buyer whenever goods were despatched and the buyer firm which is at Madras had raised the bills on Pondicherry Papers Limited Pondicherry, and collected 4 per cent sales tax and paid the same to the Government. On these facts, the assessing authority felt that since the goods had moved from Coimbatore to Pondicherry in pursuance of the assessee's contract of sale with the Madras firm, the sale is liable to be taxed at 10 per cent under the Central Sales Tax Act. The said view of the assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale as contended by the Revenue. The sale contract entered into by the assessee with the buyer at Madras dated 27th September, 1979, specifically provides that the assessee will have to arrange to transport the goods by lorry from Coimbatore to Pondicherry showing the Madras buyer as consignor and on "to pay" basis. Therefore, there is an obligation on the part of the assessee as a seller to arrange for the transport of the goods by lorry from Coimbatore to Pondicherry showing the Madras buyer as consignor. This clause in the sale contract under which it is the obligation of the seller to transport the goods to Pondicherry will clearly attract the definition of inter-State sale in section 3 of the Central Sales Tax Act, 1956. That sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 979, in fact contemplates the movement of the goods from Coimbatore to Pondicherry. It could therefore be taken that it is the contract dated 27th September, 1,979, that has occasioned the movement of the goods from Coimbatore to Pondicherry. This will be the position even if there is no subsequent sale by the assessee's buyer to the Pondicherry dealer. This is the view taken by the Tribunal in this case. The assessee's alternative case is that the goods were taken delivery by the buyer's agent at Coimbatore and it is he who despatched the goods later to Pondicherry and that the assessee has nothing to do with the despatch of the goods to Pondicherry. But the Tribunal after referring to the materials on record specifically says that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 3(a) the relevant consideration is to find out whether the sale contract between the assessee and the buyer at Madras occasioned the out of State movement of the goods. In this case, the sale contract specifically provides for the despatch of the goods by the seller to Pondicherry. Even assuming that the despatch of the goods by the seller was on behalf of the buyer, still the movement of the goods can be said to have occasioned on the contract entered into by the assessee with the Madras buyer. In this view of the matter we are inclined to agree with the view taken by the Tribunal that the turnover of Rs. 3,11,400 represents inter-State sales and not local sales. The tax case is therefore dismissed. Petition dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
