TMI Blog1989 (9) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... laces. It is a registered dealer both under the Punjab General Sales Tax Act, 1948 (as applicable to the State of Haryana) (hereinafter referred to as "the State Act ") and the Central Sales Tax Act, 1956. The Punjab State Electricity Board (hereinafter referred to as "the Board") placed orders for the supply of 750 and 3,100 transformers vide their purchase orders dated 16th December, 1969 and 29th June, 1970, respectively. Copies of these orders are annexures A-1 and A-2. The terms and conditions of both these purchase orders are identical. The said transformers were manufactured at Sonepat factory and thereafter were shown as transferred to the Rajpura branch of the company before being handed over to various offices of the Electricity Board in Punjab. The modus operandi of the company was that after the manufacture of the transformers at Sonepat, these were despatched to the company branch office at Rajpura for treating the transformers in order to make them ready for delivery as under: (a) Filling up transformers with oil (required for cooling of transformer). (b) Fixing of copper thimbles (required for connecting overhead line to the transformer bushing terminals). (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concession in the rate of tax, The case was remanded to the Assessing Authority for affording opportunity to the company to furnish requisite forms and proceeding further in accordance with law. Feeling aggrieved against the said order of the Tribunal, the assesseecompany claimed a reference to this Court under section 42 of the Haryana Act for opinion on the above referred question of law. Mr. B.K. Jhingan, the learned counsel for the assessee-company, contended that the perusal of the conditions of the purchase orders annexures A-1 and A-2 as a whole clearly shows that the transformers were despatched by the assessee from its Sonepat factory to Rajpura branch in incomplete condition because without the fixing of the accessories and putting oil in the transformers, these were not worthy of being used as such. He further maintained that the assessee-company manufactures identical transformers on the basis of the orders of the Electricity Boards of different States and thus the mere factum that the quality tests were to be conducted at the premises of the assessee-factory before their despatch to the Board is not of much consequence in concluding that the transformers were mov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se purchase orders are addressed by the Board to the assessee-company at its branch office Patiala, yet all the same the factum that clause (b) of para 22 of the purchase order clearly provided that the transformers shall be inspected by the purchaser or its duly authorised agent at the factory of the assessee at Sonepat before their despatch and that the assessee-company shall give one month's notice regarding readiness of the material for inspection for enabling the purchaser to depute its representative for the said purpose and that the same number of transformers were despatched from Sonepat factory to the Rajpura as were required to be delivered to the Board clearly spells out that goods were appropriated to the Board at Sonepat branch of the factory before their despatch and that the movement of these goods took place in pursuance of the contract of sale as envisaged under section 3(a) of the Central Sales Tax Act. Contents of clause (b) of para 22 of the purchase order annexure A-1 pertaining to inspection by the purchaser read as under: "(b) Inspection by the purchaser The purchaser or his duly authorised agent shall inspect the material and witness test before despatch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the company, it is noteworthy that it appears to be an attempt on the part of the assessee-company and the Board to evade the Central sales tax, yet all the same, above referred clauses of the contract of sale or purchase order clearly reveal that the movements of goods from the factory of the assessee located at Sonepat in Haryana took place in pursuance of the contract of sale. So, the above referred clauses are of no consequence to conclude that the movement of the goods was a branch transfer from the factory of the company to its branch office at Patiala or Rajpura. Mr. Jhingan then tried to make out that the contract of purchase or sale was not complete before the movement of goods at Sonepat as there was no acceptance of offer on the part of the Board. Mr. Jhingan relying upon the decision of the Supreme Court in Kelvinator of India Ltd. v. State of Haryana [1973] 32 STC 629, further contended that the sale of transformers took place at Patiala in the State of Punjab and thus it was not a case of movement in pursuance of the contract of sale. We find no force in this contention as that case related to the movement of goods from Faridabad to Delhi, to the distributor on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale agreement did not provide that the goods should be moved from Faridabad to Delhi, yet all the same the apex court held that since the contract of sale could be performed only by the movement of goods from Faridabad with the intention of delivering them to the purchasers, it was an inter-State sale. Learned counsel for the appellant then tried to make out a case that the transformers did not pass to the Electricity Board till these were made fit for use after fixing the above referred fixtures. Reliance in this regard was placed on the provisions of section 21 of the Sale of Goods Act, 1930. There is no dispute regarding the legal position but these provisions are not attracted to the case in hand as herein the controversy is whether the goods were moved from Sonepat to Rajpura or Patiala in pursuance of the contract of sale. The apex court in English Electric Company of India Ltd. v. Deputy Commercial Tax Officer [1976] 38 STC 475, had further held that when the movement of goods from one State to another is an incident of the contract of sale, it is a sale in the course of inter-State trade falling under section 3(a) of the Central Sales Tax Act and it does not matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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