Situs of sale for surcharge on unascertained goods depends on appropriation, not passing of property.

For unascertained or future goods, the situs of sale under the Tamil Nadu Sales Tax (Surcharge) Act, 1971 is fixed by the place and time of appropriation to the contract, not by the later passing of property. Delivery to a carrier for transmission to the buyer may constitute appropriation, and f.o.r. terms or buyer inspection at destination do not defer appropriation where the goods are loaded and handed over at the seller's place. On that basis, surcharge was not leviable because appropriation occurred in the non-surcharge area, not at the buyer's premises.

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Issues: Whether surcharge under the Tamil Nadu Sales Tax (Surcharge) Act, 1971 was leviable on sales of unascertained goods delivered by lorry to the buyer's premises, and whether the place of passing of property or the place of appropriation governed the situs of sale.

Analysis: The decisive test under section 5(1)(ii) of the Tamil Nadu Sales Tax (Surcharge) Act, 1971 is the place where unascertained or future goods are within the relevant area at the time of their appropriation to the contract of sale. Passing of property is not the criterion for fixing situs under this provision. The special rules in section 4(2) of the Central Sales Tax Act and the corresponding explanation to section 2(n) of the Tamil Nadu General Sales Tax Act likewise make appropriation, not transfer of title, the controlling factor. Delivery to a carrier for transmission to the buyer may amount to appropriation, and f.o.r. terms or buyer's inspection at destination do not postpone appropriation to the buyer's premises where the goods are loaded and handed over to the carrier at the seller's place.

Conclusion: Surcharge was not leviable, because appropriation took place at the seller's place in the non-surcharge area and not at the buyer's premises.

Final Conclusion: The levy of surcharge for the assessment years in question could not be sustained, and the common order of the revenue authority was set aside.

Ratio Decidendi: For unascertained goods, the situs of sale for surcharge purposes is fixed by the place and time of appropriation to the contract, and not by the subsequent passing of property or delivery terms such as f.o.r. or inspection at destination.

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