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Issues: (i) Whether the writ petitions should have been dismissed on the ground of availability of an alternate statutory remedy; and (ii) whether the sales in question were subsequent inter-State sales effected by transfer of documents of title during movement of goods so as to fall under section 3(b) and section 6(2) of the Central Sales Tax Act, 1956 and remain outside the scope of the Rajasthan Sales Tax Act, 1994.
Issue (i): Whether the writ petitions should have been dismissed on the ground of availability of an alternate statutory remedy.
Analysis: The existence of an alternate remedy is not an absolute bar to the exercise of writ jurisdiction. Where the impugned action is alleged to be without authority of law, beyond jurisdiction, or likely to cause unnecessary harassment through coercive tax recovery, the High Court may entertain the petition. Here the challenge was that the assessing authority had proceeded to levy State tax on transactions said to be governed exclusively by the Central Sales Tax Act, and the controversy raised an arguable question of jurisdiction rather than a mere factual dispute. In such a situation, relegating the appellants to the alternate remedy was not justified.
Conclusion: The dismissal of the writ petitions on the ground of alternate remedy was unsustainable and is against the Revenue.
Issue (ii): Whether the sales in question were subsequent inter-State sales effected by transfer of documents of title during movement of goods so as to fall under section 3(b) and section 6(2) of the Central Sales Tax Act, 1956 and remain outside the scope of the Rajasthan Sales Tax Act, 1994.
Analysis: A sale falls within section 3(b) only when it is effected by transfer of documents of title to the goods during their movement from one State to another, and Explanation 1 fixes the commencement and termination of such movement by reference to delivery to the carrier and delivery from the carrier. On the facts found, the goods were booked from Gujarat to the ultimate buyers in Rajasthan, the appellant did not take physical delivery at any stage, the documents of title were endorsed in favour of the subsequent buyers during transit, and the transporter delivered the goods to those buyers. Mere book entries, invoices, challans, or accounting notations at the appellant's branch could not amount to constructive delivery terminating inter-State movement. The assessing authority's presumption of local sale was therefore contrary to the statutory scheme and the factual record.
Conclusion: The transactions were exempt subsequent inter-State sales under section 3(b) and section 6(2) of the Central Sales Tax Act, 1956, and the levy under the Rajasthan Sales Tax Act, 1994 was without jurisdiction and against the Revenue.
Final Conclusion: The appellants were entitled to writ relief, the State tax demand could not be sustained, and the impugned notices and assessment order were liable to be quashed.
Ratio Decidendi: A sale effected by endorsement of documents of title during the currency of movement continues to be an inter-State sale until actual delivery is taken from the carrier, and State tax cannot be levied by treating such transit transactions as local sales on the basis of mere book entries or presumed constructive delivery.
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