Situs of sale for specified goods depends on location at contract stage, defeating Tamil Nadu tax on DEPB passbook sale.

For specified or ascertained goods, the situs of sale under the Tamil Nadu Value Added Tax Act is the State where the goods are located when the contract is concluded. The DEPB passbook was treated as specified goods, and since the passbook, seller, and purchaser were all in Bombay when the transaction was finalised, Tamil Nadu had no taxing jurisdiction. A mere export connection through Tuticorin Port did not create a sufficient territorial nexus to tax the sale. The assessment bringing the turnover to tax in Tamil Nadu was therefore unsustainable and was set aside.

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Issues: Whether the sale of the DEPB passbook was taxable in Tamil Nadu or in Maharashtra, having regard to the situs of the transaction under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The DEPB passbook was treated as specified or ascertained goods and not as unascertained future goods. Under Explanation V to Section 2(33) of the Tamil Nadu Value Added Tax Act, 2006, the situs of a sale of specified or ascertained goods is the State where the goods are located when the contract of sale is made. The passbook, the seller, and the purchaser were all in Bombay when the transaction was finalised. The mere fact that the petitioner was an exporter using Tuticorin Port did not supply a sufficient territorial nexus for Tamil Nadu to tax the sale. The distinction between tangible and intangible goods did not alter the statutory test for situs in the present case.

Conclusion: The turnover from the DEPB sale was not taxable in Tamil Nadu and the assessment bringing it to tax in that State was unsustainable.

Final Conclusion: The assessment order was set aside and the writ petition was allowed on the ground that the transaction fell outside the taxing jurisdiction of Tamil Nadu.

Ratio Decidendi: For specified or ascertained goods, the taxable situs of sale is determined by the location of the goods at the time the contract is concluded, and a mere business or export connection with the State is insufficient to fasten tax liability there.

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