TMI Blog1991 (6) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... that the movement of the goods was not as a result of stipulations in the order of the customer but as per the order of the Madras branch of the assessee. The assessing authority proceeded to say that the Madras branch had obtained orders in their own capacity, got it manufactured by their units elsewhere got the manufactured stocks, brought to Madras and sold it to the customers as and when required. The assessing authority therefore rendered a finding that it was a local sale warranting levy under the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act"). On appeal, however, the Appellate Assistant Commissioner found that there was a link between the movement of the goods and the contract of the two customers who h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the movement of the goods from Calcutta to Madras." 2.. The Joint Commissioner initiated suo motu proceedings under section 34 of the Act. After giving an opportunity to the assessee and considering their objections set aside the appellate order and restored that of the assessing authority. In coming to this conclusion the Joint Commissioner observed that the assessees were not able to prove that the goods as mentioned in the gate pass were moved with the intention to deliver them entirely in pursuance of a firm contract. Hence the present appeal. 3.. Before dealing with the arguments of the learned counsel for the appellant it would be proper to record here the correct modus operandi of the transaction. The disputed turnover consists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. In State of Madras v. South Indian Export Company Limited [1973] 32 STC 199 (Mad.) the assessee was a sole selling representative within the State of Madras, for the Titaghur Paper Mills Co. Ltd., Calcutta. They canvassed orders and collected the indents placed by customers on the paper mills at Calcutta and forwarded them to Calcutta. The paper mills manufactured the goods, packed them in different packages with distinct marks of the customers and sent the entire packages to the assessee. The paper mill debited various customers with the value of the paper sent. The assessee cleared the goods and delivered the packages to the concerned customers, collected amounts due from them as per invoices sent by the paper mills. It is needless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had its factory at Hyderabad. Its branches were engaged in effecting sales and looking after sales promotion. The branches received orders from customers for supply of goods, conforming to definite specifications and drawings and advised the factory at Hyderabad. The factory manufactured the goods according to the designs and specifications and despatched them to the respective branches by way of stock transfer. It was at the branches that the customers inspected the goods and accepted them. It was the branches which raised the bill and received the sale price. Even in such circumstances the Supreme Court of India held that notwithstanding the fact that the branch office itself was concerned with despatching, billing and receiving of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to such characteristics of the sale transaction we have no hesitation in holding that the sales were inter-State sales and not amenable to the Tamil Nadu General Sales Tax Act, 1959. The only contention of the learned counsel for the Revenue is that the link between the contract and the movement of the goods was lost when the goods came into the possession of the Madras office. It was also contended that the goods were sold at the discretion of the Madras branch and the price collected. This argument of the counsel for the Revenue is contrary to the facts as found by us earlier. We therefore reject the arguments of the counsel for the State. We are also of the opinion that the Joint Commissioner fell into an error by characterising the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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