TaxTMI 
TaxTMI 
1962 (8) TMI 42
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....ge their liability for the period April 1, 1955 to September 6, 1955. The facts necessary for the decision of this appeal are these: Appellant No. 1-The Cement Marketing Co., Ltd.-are the sales managers of the second appellant-The Associated Cement Co., Ltd.- appointed under an agreement dated April 21, 1954. The High Court has described the first appellant to be the distributors of the secondappellant. The second appellant is a manufacturer of cement and at the material time it had over a dozen factories in different parts of India, none of which was in the State of Mysore. The head office of the first appellant is at Bombay and it had then a branch office at Bangalore in the State of Mysore. The first appellant was registered as a dealer under the Mysore Sales Tax Act, 1948, hereinafter called the "Mysore Act". At all material times cement was and still is a control- led article. Whether the sale was to a Government Department, i.e., to the Director-General of Supplies and Disposals, Government of India, New Delhi, or to a person authorised by the said officer or to the public it was effected on authorisations given to the buyers by appropriate Government authorities and produ....
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....he cement released could be used only for the purpose for which it was given; the authorisation was not transferable; the authority could, if necessary, revoke the authorisation at any time and even the orders booked under the authorisation could be cancelled. The purchaser or the indentor had then to place an order with the first appellant as sales managers of the second appellant stating the requirement, where the goods were to be sent and how they were to be sent. The seller entered into a contract with the first appellant. This contract is in a standard form and gives conditions of sale. Thereupon the first appellant instructed its Bombay office to despatch the cement in accordance with the instructions of the buyer and the authorisation. In this letter they had to mention the number of the authorisation and the person who had issued it and also to whom the goods were to be sent and how and certain other details, which are not necessary for the purposes of this appeal, were also to be given. Each instruction indicates that it was issued for and on behalf of appellant No. 2 by appellant No. 1 as its sales managers. A copy of the letter of instruction was sent to the fa....
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....ysore and therefore the contention that cement was loaded outside the State of Mysore and despatched to the purchaser did not convert sales into inter-State sales but were intra-State sales. It appears that the true nature of the transaction was not correctly considered by the High Court. The modus operandi above-mentioned shows that before an intending purchaser could obtain cement he had to get what is called an authorisation from a Government authority which nominated the factory from which the intending purchaser had to get his supplies of cement. That authorisation with an order had to be given to the first appellant; and after a contract in the standard form was entered into the first appellant sent the order to the factory named in the authorisation and that factory then supplied the requisite goods to the purchaser. The factory from where the cement was to be supplied was not in the hands or at the option of the first appellant, but was entirely a matter for the Government authority to decide, so that the cement which was supplied from a particular factory was supplied not at the choice of the first appellant but pursuant to the authorisation. It was contended ....
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....ees were registered dealers under the C. P. and Berar Sales Tax Act, 1947. It was held that the assessees imported the finished tobacco into Madhya Pradesh from persons who were carrying on in the State of Bombay business of processing tobacco and selling the goods and there was, as a result of these transactions movement of goods from the State of Bombay to the State of Madhya Pradesh and therefore the trans- actions involved movement of goods across the State border and they were not liable to be taxed by virtue of Article 286(2) of the Constitution. In State of Travancore-Cochin and Others v. Bombay Co. Ltd. [1952] S.C.R. 1112; 3 S.T.C. 434., which was a case under Article 286(1)(b), i.e., sale and purchase in the course of export trade, Patanjali Sastri, C.J., observed: "A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction." At page 1120....
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....us the tests which have been laid down to bring a sale within inter-State sales are that the transaction must involve movement of goods across the border: Mohanlal Hargovind's case [1955] 2 S.C.R. 509; 6 S.T.C. 687.; trans- actions are inter-State in which as a direct result of such sales the goods are actually delivered for consumption in another State: M/s. Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax and Others [1955] 2 S.C.R. 483, 504; 6 S.T.C. 627.; a contract of sale must involve transport of goods from one State to another under the contract of sale: Bengal Immunity Co.'s case [1955] 2 S.C.R. 603, 784-5; 6 S.T.C. 446. In the case of sales in the course of export or import the test laid down was a series of integrated activities commencing from an agreement of sale and ending with the delivery of goods to a common carrier for export by land or by sea: The Bombay Co. Ltd. case [1952] S.C.R. 1112; 3 S.T.C. 434. "In the course of" was explained to mean a sale taking place not only during the activities directed to the end of the exportation of the goods out of the country but also as part of or connected with such activities, and "integrated activities" was exp....
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....ellant and the second appellant is different from that which existed between Rohtas Industries Ltd. and the Cement Marketing Co. of India in the case above-cited. On an examination of the agreement between those two companies this Court held that the relationship which existed between the two was of seller and buyer and not of principal and agent. In the present case the agreement is quite different. In the first clause of the agreement between the two appellants and the Patiala Cement Co. dated April 21, 1954, the first Appellant was appointed the sole and exclusive sales manager of the second appellant and as such the first appellant was entitled to enter into contracts of sale, receive payments of the same and do all acts and things necessary for the effective management in connection with the contracts of sale entered into on behalf of the principals. The sale price and the terms and conditions of sale were to be determined by the principals. The sales manager was to keep its administrative and technical staff at such places in India as was determined by the principals. All the establishment charges and other expenses of the sales managers were for and on behalf of the principa....