TMI Blog1962 (4) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... e, whether they are sales in the course of inter-state trade or commerce within the meaning of Article 286(2). 2. The assessee-company, who have their registered office at Bombay, are the biggest among the companies in India, which manufacture cement. They own a number of cement factories at different places in India and Pakistan. They have a cement factory at Tadepalli in Guntur District, within the limits of the State of Andhra Pradesh. The factory is known as the Krishna Cement Works. The Cement Marketing Company of India are the Sales Managers of the assessee company. That company though separately registered under the Companies Act, as a joint stock company, is a subsidiary of the assessee company. 3. The period covered by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be made in whole or in parts at our (sic) after the time/period indicated in the order at the sole discretion of the Company. 6. Destination (Stations outside Andhra). 7. Price: a. Packed in jute bags Rs......net per ton in full wagonloads F. O. R. destination. b. The above price is subject to change without notice. The F. O. R. destination price ruling on the date of despatch will be payable by the buyer. c. Freight Rise: In the event of there being an increase in railway freight or any surcharge thereon after the date of the contract and during the period of delivery, the buyer shall pay the additional freight or surcharge as may be introduced by the sellers to meet such increase from time to time on such portion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d conditions of the contract of sale, it is manifest that the liability of the sellers ceases the moment the cement is delivered F. O. R. Works siding in full wagonloads. 7. In his letter to the Commercial Tax Officer, dated 5th May, 1957, the Manager, Krishna Cement Works has explained the course of dealings as follows: The terms of sale in these cases were: a. Delivery of Cement was made free on rails at the siding of Krishna Factory. b. Railway receipt was made out in the name of the purchasers residing outside Andhra State / Pradesh. C. The goods were at the purchaser's risk from the time delivery was made by the Krishna Factory to the carrier and the railway receipt obtained for the goods. d. Price was quoted as F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate, that the seller undertook to book the goods and obtain the railway receipt, and having regard to these factors, the delivery must be treated as having taken place outside the State, which would, therefore, attract the Explanation. It is further contended that the cement despatched from Tadepalli by railway wagons did eventually reach places outside the State at the end of the journey where the goods were delivered as a direct result of the sale, and therefore the exemption embodied in the explanation is attracted. 10. As was pointed out by a Division Bench of the Madras High Court in Mohammad Ishok v. State of Madras, ((S) 1955-6 STC 230 at p. 234: AIR 1955 Mad 502 at p. 503) the crucial fact which has to be established before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. The carrier was thus constituted an agent of the buyer for accepting delivery of the goods on his behalf with the result that the goods have 'actually been delivered within the State.' 14. Having regard to the course of business followed by the assessee-company with their purchasers and the specific terms of the contract of sale mentioned above, it is difficult to hold that the sales took place outside the State or that the goods were actually delivered by the assessee-company outside the State. It is clear that not only the sales were intended to be inside sales but as a matter of fact all the essential ingredients of sale were completed within the State. The property in the goods passed within the State and possession wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the sixth amendment, and it ran as follows: Except in so far as Parliament may by law otherwise, provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce. 18. It is contended on behalf of the assessee-company that the goods were purchased in the course of inter-State trade and that the levy of sales tax on the turnover in question was prohibited by Article 286(2). In order that a sale or purchase might be inter-State, it is essential that there must be transport of goods from one State to another under the contract of sale or purchase. In the Bengal Immunity Co. Ltd. v. State of Bihar, AI ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
