TMI Blog2010 (8) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal, Mumbai to seek the decision of this court on the following substantial question of law: Whether, on the facts and in the circumstances of the case and on the basis of the evidence placed on record the Tribunal was justified in coming to the conclusion that the impugned sale was not a sale covered by section 3(a) of the Central Sales Tax Act, 1956? The facts The applicant, M/s. K.C. Metal Industries, carries on the business of manufacture and sale of copper strips and bars. In respect of the said business, the applicant is registered under the Bombay Sales Tax Act, 1959 ( the BST Act , for short) as well as under the Central Sales Tax Act, 1956 ( the CST Act , for short). Pursuant to an order received from M/s. Mody Sons Pvt. Ltd., Mumbai, the applicant supplied goods worth Rs. 26,86,615 to their branches situated at Vapi and Silvasa (referred to as works by the applicant). The applicant was assessed by the Assistant Commissioner of Sales Tax (Assessment), Borivali Division, Mumbai, for the period April 1, 1990 to March 31, 1991, both under the BST Act and the CST Act. It was contended on behalf of the applicant, during the course of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which reads thus: 3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce. 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; or (b) . . . It is submitted on behalf of the applicant that the order placed by M/s. Mody Sons Pvt. Ltd., Mumbai, was for goods worth Rs. 26,81,615 required at their factory situated at Vapi. It is submitted that the bills issued by the applicant is on Modison Metals Pvt. Ltd., at 85/A GIDC Estate, Phase No. 1, P.O. Vapi, Dist. Valsad 296 195. The registration number, of the vehicle provided by the buyer, is also set out on the bills and it is also recorded in the bills that the transportation of goods is From Bombay to Vapi . It is submitted that the purchasers also claimed MODVAT from the Excise Department in Vapi. Thus, the movement of the goods from Mumbai to Vapi was from one State to another. As a result, the sale is covered under section 3(a) of the CST Act. It is submitted that the applicant therefore rightly claimed sales under section 75 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Revenue and against the applicant. Conclusion We have considered the submissions advanced on behalf of the applicant and also on behalf of the respondent. We have perused the orders passed in the first appeals as well as in the second appeals and have also perused the decision of this court in Nivea Time [1998] 108 STC 6 and the decisions of the honourable Supreme Court relied on in the said decision. Section 3(a) of the CST Act provides that 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 occasions the movement of goods from one State to another. Therefore, in order to hold that the sale or purchase of goods has taken place in the course of inter-State trade or commerce it is mandatory for the sale or purchase to occasion the movement of goods from one State to another. It is therefore necessary to see as to when it can be said that the sale or purchase has occasioned movement of the goods from one State to another. In the case of Oil India Ltd. v. Superintendent of Taxes [1975] 35 STC 445 (SC), there was no specific provision in the agreement for movement of crude oil from Assam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in the contract itself. It will be enough if the movement is in pursuance of and incidental to the contract of sale. It was further observed: . . . If there is a conceivable link between the movement of the goods and the buyer's contract, and if in the course of inter-State movement the goods move only to reach the buyer in satisfaction of his contract of purchase and such a nexus is otherwise inexplicable, then the sale or purchase of the specific or ascertained goods ought to be deemed to have taken place in the course of inter-State trade or commerce as such a sale or purchase occasioned the movement of the goods from one State to another. . . In the case of Nivea Time [1998] 108 STC 6 decided by this court, the assessee manufactured watches at its factory at Daman. The auction of watch movements by the Customs (Preventive) Collectorate, Bombay was open to actual users only. In the conditions of auction sale, it was mentioned that the purchaser had to be a small-scale unit and an actual user. In the cash memos issued by the customs authorities to the assessee, the registration number of the assessee's factory at Daman as small-scale unit was also mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the said goods from the excise department in Vapi. (viii) Shri Murli Hamdeo Yadav has filed his affidavit stating that he had delivered the goods more particularly set out in his affidavit from the premises of the applicant at Mumbai to Modison Metals Pvt. Ltd., 85/A GIDC Estate, Phase No. 1, P.O. Vapi, Dist. Valsad and Modison Pvt. Ltd., Building No. 6, Government Industrial Estate, Piparia, Silvasa. (ix) C forms have been issued by the buyer to the applicant in respect of the said goods. As is decided by the honourable Supreme Court in its decisions in the case of Oil India Ltd. [1975] 35 STC 445 and English Electric Company of India Ltd. [1976] 38 STC 475 (SC) and followed by this court in Nivea Time [1998] 108 STC 6, no matter in which State the property in the goods passes, a sale which occasions movement of goods from one State to another State is a sale of inter-State trade. Inter-State movement must be the result of a covenant express or implied in the contract of sale or an incident of the contract. It is not necessary that the sale must precede the inter-State movement in order that the sale may be deemed to have occasioned such movement. It is also not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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