TMI Blog1998 (6) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered dealer and had relied on the proviso to section 6(2)(b) of the Act which exempts from tax the transaction entered into by the assessee if it satisfies the requirements laid down therein. 2.. The undisputed facts are that the assessee had placed orders with the other manufacturers in this State. The order required the manufacturers to conform, strictly to the drawings provided by the assessee and the sample approved by the assessee. The order provided that the goods had to be delivered either to the assessee or to its nominee. There was a warranty clause that all units were to be covered against the manufacturing defects for a period of six months from the date of delivery to the user. The vendor was required to inform the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also not placed any material to drag out the claim of the assessee. 5.. It is the case of the assessee that once the sale is found to be an interState sale and all the conditions stipulated in section 3(b) are satisfied, it cannot be regarded as a logal sale even if the property in the goods is found to have passed within the state. counsel for the assessee referred to section 4 of the Act which opens with the words "Subject to the provisions contained in section 3". It is only when a sale is found to be not of the inter-State character, section 4 would be attracted for the purpose of determining the location of the sale. Counsel for the assessee further submitted that on facts proved in this case the assessee is entitled to the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimate buyer to a Trading Company which had bought the goods from a manufacturing company would be read as a part of the contract under which the manufacturing company, placed the goods on rail within the State of Tamil Nadu with instructions to deliver the goods to the ultimate buyers outside the State. It was not in dispute, in that case, that the instructions by the ultimate buyer had only been given to the Trading Company and not to the manufacturing company which, under the contract of sale o the goods with the Trading Company had despatched the goods by rail and thereby effected the sale to the Trading Company. If the delivery instructions given by the assessee to its vendor are read as a part of the contract between the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee did not acquire title by reason of the handing over of the lorry receipts, but under the terms of the contract which required delivery to the carrier. 8.. The fact-situation before the Supreme Court in the case of Commissioner of Income-tax, Madras v. Mysore Chromite Limited [1955] 27 ITR 128 on which reliance was placed is however different. The Constitution Bench therein held that in the case of f.o.b. sales, the vendor has a right in those goods and by postponing the point of transfer of title to the goods to the point at which the bill of lading was handed over to the vendee, and the passing of the title would take place only at the place where the receipts were handed over. 9.. As we have found that the sale effected by the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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