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of <h1>Court rules on sales tax jurisdiction under Bombay Sales Tax Act, 1959.</h1> <h3>Batliboi & Company Pvt. Ltd. Versus The State of Maharashtra</h3> The Court determined that the sale between the parties took place within the State of Maharashtra, subjecting it to sales tax under the Bombay Sales Tax ... - Issues Involved:1. Whether the transaction between the applicants and Kirloskars was a sale within the State of Maharashtra as defined under section 2(28) of the Bombay Sales Tax Act, 1959.2. Whether the sale in question was a sale in the course of import and hence not liable to tax under the Bombay Sales Tax Act, 1959.3. Whether the sale in question was a sale outside India and hence not subject to sales tax under the Bombay Sales Tax Act, 1959.Detailed Analysis:1. Sale within the State of Maharashtra:The applicants, M/s. Batliboi & Company Pvt. Ltd., entered into a contract with M/s. Kirloskar Brothers Ltd. to sell a machine imported from Czechoslovakia. The machine was shipped to Bombay, cleared by the applicants, and subsequently sent to Kirloskars. The Deputy Commissioner concluded that the sale took place in Maharashtra, making it subject to sales tax under section 2(28) of the Bombay Sales Tax Act, 1959. The Tribunal upheld this decision, leading to a reference to the High Court.2. Sale in the Course of Import:The applicants argued that the sale was in the course of import and thus exempt under section 5(2) of the Central Sales Tax Act, 1956. The Court noted that for a sale to be considered in the course of import, it must either occasion the import or involve the transfer of documents of title before the goods cross customs frontiers. In this case, the documents of title were not transferred to Kirloskars before the goods cleared customs. The Court found that the import was not occasioned by the contract with Kirloskars but was independent of it, as the applicants had already placed an order for the machine with the Czech manufacturers and initially offered it to the Defence Ministry.3. Sale Outside India:The applicants contended that the sale was outside India based on section 4(2) of the Central Sales Tax Act, 1956. The Court clarified that section 4 deals with sales within India and does not apply to sales outside the country. The applicants argued that the property in the goods passed to Kirloskars either in Czechoslovakia or on the high seas. The Court rejected this, stating that the property could not pass until the applicants themselves owned the goods. There was no evidence that the Czech manufacturers had transferred ownership to the applicants before shipment. The conduct of the parties indicated that the property in the goods passed only when they were sent by rail from Bombay to Kirloskarwadi.Conclusion:The Court concluded that all events constituting the sale occurred in Maharashtra: the agreement of sale, delivery of goods, payment of price, and appropriation of goods to the contract. Thus, the sale was within the State of Maharashtra, making it subject to sales tax under the Bombay Sales Tax Act, 1959. The question was answered in the affirmative, in favor of the department, and against the applicants. The applicants were ordered to pay the costs of the reference.
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