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2008 (7) TMI 914

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..... ssioner of Trade Tax, U.P., Lucknow has filed the present revision under section 11(1) of the U.P. Trade Tax Act, 1948 against the judgment and order dated June 30, 1994 passed by the Trade Tax Tribunal, Gorakhpur in Second Appeal No. 535 of 1991 relevant to the assessment year 1973-74. The dealer-opposite party was carrying on the business of foodgrains. For the assessment year in question 1973-74 it disclosed its taxable turnover inter-State sales at Rs. nil but was assessed at Rs. 2,85,443.39 by the assessing officer by the order dated March 31, 1990 which was confirmed by the first appellate authority in Appeal No. 796 of 1990 on May 9, 1991. But the Tribunal by the order under revision has allowed the second appeal filed by the dealer- .....

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..... ts in their names. In para 4 of the order the first appellate authority reached to a definite conclusion that the question of delivery of goods to such purchasers does not arise as the title of goods stood transferred only after endorsement on the railway receipts in favour of such purchasers. It, therefore, concluded that the transaction in question is an inter-State transaction. The Tribunal without setting aside the aforestated finding has drawn an inference that the sale in question is not inter-State sales but intraState sale. In the memo of revision the State has raised the following question of law: Whether the Trade Tax Tribunal was legally justified to hold that the impugned transactions are not inter-State sales despite the .....

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..... not fall within clause (b) nor will the sale in which the property in the goods passes after the movement from one State to another has ceased to be covered by the clause. Accordingly, a sale effected by transfer of documents of title after the commencement of the movement and before its conclusion as defined by the two termini set out in Explanation (1) and no other sale will be regarded as an inter-State sale under section 3(b). Applying the said ratio, on the facts of the present case, it is admitted at least by the dealer-opposite party that it got the railway receipts in its name and transferred the same by making endorsement after movement of goods from the State of U.P. to outside of the State. On the relevant facts one and the only .....

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..... rrect. The learned counsel for the dealer-opposite party, on the other hand, has placed reliance upon other Division Bench decisions, namely, (1) Maheshwari Devi Jute Mills Ltd., Kanpur v. Commissioner of Sales Tax [1971] 27 STC 61 (All) and (2) Bhoorey Khan Glass Bangle Factory v. Commissioner, Sales Tax, U.P., Lucknow [1974] 34 STC 332 (All) in support of his contention that the transaction in question is intra-State sale. A close scrutiny of the facts and the controversy involved in the cases would show that they were decided on different factual matrix and are distinguishable on facts. In the case of Maheshwari Devi Jute Mills Ltd. [1971] 27 STC 61 (All) under the terms of the contact it was provided that the goods sold shall be .....

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..... be no sale in the course of inter-State trade . After quoting the above paragraph, the High Court on the basis of the contract entered into between the parties observed that the contract specifically contemplated that the goods if sold ex-mill delivery, it cannot be said that if the goods subsequently crossed the border of the State of U. P. to neighbouring State it was a result of covenant or an incident of contract of sale. In the case on hand, the dealer got the railway receipts in his name and endorsed in the name of Gorakhpur party after receiving the consideration and thus the sale has been effected by transfer of document of title to the goods during their movement from one State to another. It is covered by clause (b) of section 3 o .....

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..... not lay down any ratio to be followed. The observation made therein should be understood in the context of the facts of that case only. The question as on given facts that transaction is an inter-State sale or intra-State sale is definitely a question of law which is to be decided keeping in view the parameters of inter-State sale as enumerated under section 3 of the Central Sales Tax Act. In my considered view, the controversy involved in the present case is governed by clause (b) of section 3 of the Central Sales Tax Act and is fully covered by the decision of the Division Bench of this court in the case of Commissioner of Sales Tax, U.P. v. Mewalal Kewal Kishore [1976] 38 STC 551; [1976] UPTC 571. Viewed as above, the question rais .....

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