Court affirms tax liability on inter-State sale of silicon carbide; movement from Tamil Nadu to West Bengal decisive

The Court upheld tax liability under the Central Sales Tax Act on a sale transaction involving silicon carbide. Despite the initial buyer's failure to pay and clear the goods, the subsequent sale to a buyer in West Bengal was deemed an inter-State sale. The Court found that the goods had not been delivered to the initial buyer in Calcutta, and the movement from Tamil Nadu to West Bengal had not concluded until the subsequent buyer received the goods. The Court dismissed the revision petition, affirming tax liability on the turnover in question.

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Issues:
Liability to tax under the Central Sales Tax Act on the turnover of a specific sale transaction.

Analysis:
The petitioner, a dealer in chemicals, sold silicon carbide to a buyer in Calcutta for a certain amount which included central sales tax. The goods were transported to Calcutta, but the buyer did not pay the amount or clear the goods. The dealer then sold the goods to another buyer in West Bengal. The dealer claimed that the initial sale was unfructified, and the subsequent sale was a local sale in West Bengal, not an inter-State sale. However, all authorities, including the Sales Tax Appellate Tribunal, rejected this claim. The petitioner argued that the subsequent sale was not liable to tax under the Central Sales Tax Act as there was no agreement for movement of goods from Tamil Nadu to West Bengal. The government advocate supported the Tribunal's decision.

The Court noted that the goods were sent to Calcutta by lorry as per the agreement with the initial buyer. Had the initial sale fructified, it would have been an inter-State sale. The subsequent sale occurred after the first buyer refused to accept the goods. The dealer failed to prove that a local agent took delivery of the goods in Calcutta or that the journey had terminated as per the Act's provisions. Section 3(b) of the Act considers a sale inter-State if documents of title are transferred during the movement of goods between states. The Court found that the goods were not taken delivery from the carrier, and the movement from Tamil Nadu to West Bengal had not terminated until the subsequent buyer received the goods.

Referring to a previous decision, the Court held that the transaction fell under section 3(b) of the Act, making it an inter-State sale liable for taxation. The Court dismissed the revision petition, upholding the tax liability on the turnover in question.

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