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2015 (12) TMI 468 - MADRAS HIGH COURT

2015 (12) TMI 468 - MADRAS HIGH COURT - [2015] 83 VST 536 (Mad) - Classification of sale - Inter state sale or local sale - whether the transaction of purchase of cotton between the respondent Mill and one Maharashtra State Co-opertive Cotton Growers Marketing Federation Ltd., Bombay is inter state sale or local sale by reason of delivery of goods, after payment of entire sale consideration within Tamil Nadu - Held that:- Tamil Nadu Sales Tax Appellate Tribunal, after verifying the facts stated .....

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purchase in the State and accordingly allowed all the five appeals. - As the findings rendered by the Tribunal are based on material facts and supportive documents and sustained by sufficient reasoning, we find no reason to interfere with the same. - Decided against Revenue. - T.C. (R) No.40 of 2015 - Dated:- 3-6-2015 - MR. R.SUDHAKAR AND MS. K.B.K.VASUKI, JJ. For The Petitioner : Mr.Manohar Sundaram, AGP (T) ORDER The State in this Tax Case Revision seeks to revise the order of the Tamil Nadu S .....

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on Growers Marketing Federation Ltd., Bombay (hereinafter shortly referred to as Federation) is inter state sale or local sale by reason of delivery of goods, after payment of entire sale consideration within Tamil Nadu. While the original Assessing Officer and the Appellate Assistant Commissioner (CT), Madurai have, for the reasons recorded in the order, negatived the contention raised on the side of the assessee regarding the nature of the transaction as inter state sale and arrived at a concl .....

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or the Assessment year 1991-92 as levied by the Assessing Officer and as sustained by the Appellate Assistant Commissioner. Aggrieved against the same is the present Tax Case Revision by the State before this court. 3.The learned Additional Government Pleader (Taxes) appearing for the Revision petitioner has, in support of his contention that the transaction in question is only the local sale, reiterated the same points as raised before Authorities below that the goods remained the property of t .....

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assessee Mill, only in pursuance of the contract. (iii)in the lorry way bill accompanied the goods, the name of the buyer and seller are mentioned as Annamalaiyar Mills and Maharashtra State Co-operative Cotton Growers Marketing Federation Ltd., Bombay respectively. (iv)the movement of goods of the seller is not with reference to any buyer and they were not in search for buyers after storing the goods in the godown at Tamil Nadu. In this case, the goods have been moved with reference to the firm .....

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inciples laid down by the Hon'ble Supreme Court in South India Viscose Ltd v. State of Tamil Nadu, reported in 48 STC 232 and also by applying the view of the TNTST, Chennai in the case in TC(A) Nos.2803 to 2805 of 1997 and TC (R) Nos.112 and 114 of 1998 etc dated 1.11.1999, was of the firm view that the transaction cannot be considered as local sale, but only as inter state purchase and the same was not liable to tax under the TNGST Act 1959 at the point of last purchase in the State and ac .....

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chase at the hands of the appellants or a local purchase liable to be taxed under the TNGST Act, 1959 i.e., whether the transactions fall under the definition of section 3(a) of the CST Act, 1956 or 2(n) of the TNGST Act 1959. The points involved in these cases are that the appellants/mill have placed an order with the Maharashtra State Co-operative Cotton Growers Marketing Federation vide their letter dated 11.2.1993 and further by a letter dated 19.2.1983, the Federation confirms the letter an .....

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hether the transactions which falling under section 4 of the CST Act 1956. Regarding the first point whether the transaction is falling under section 3(a) of the CST Act, 1956, the relevant section is extracted below. "Section 3(a) of the CST Act, 1956: A sale or purchase of goods shall be deemed to take place in the course of interstate trade of commerce if the sale or purchase a) Occasions the movement of goods from one State to another; or b)Is effected by a transfer of documents of titl .....

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another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State". We examined whether the appellants' transactions fall under the above mentioned section 3(a) of the CST Act 1956. If it falls under the above section, the local Act and the section 4 of the CST Act, 1956 need not be applied. Section 3(a) of the CST Act, 1956 states that "if the sale or purchase occasioned the movement of goods from one State to another& .....

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preme Court in various decisions. In the case of South India Viscose Ltd., v. State of Tamil Nadu, reported in 48 STC 232, "that if there is a conceivable link between the contract of sale and movement of goods from one State to another in order to discharge the obligation under the contract of sale the inter-position of an agent of the seller, who may temporarily intercept the movement, will not alter the interstate character of the sale". In this case, even considering the said depot .....

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les. We have given careful consideration with reference to the facts of these cases. It is an admitted fact that the Federation has delivered the goods only after receipt of the payment in Tamil Nadu from the Godown. Because of this factor, the disputed transaction cannot be considered as local sale as per the decision of the Hon'ble Supreme Court in the case of Oil India Ltd. v. Superintendent of Taxes reported in 35 STC 445 wherein it has been held that a sale which occasions movement of g .....

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definition of interstate sales defined under section 3(a) of the CST Act, 1956. The implication of section 4 and 4(a) of the CST Act 1956 has also been examined by the Hon'ble TNTST, Chennai in the case relied on by the appellants. We also have examined the fact since the transit insurance has been paid by the Federation for the goods where the transactions can be considered as a local sale. In this regard the learned Authorised Representative contended that the transit insurance charges ha .....

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