1962 (8) TMI 43

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....--   The Judgment of the Court was delivered by   SARKAR, J.-These are two petitions, under Article 32 of the Constitution asking for writs to quash certain assessment orders imposing sales tax and for consequential reliefs preventing the levy and collection of that tax. The petitioners allege that the assessment orders are wholly void and therefore affect their fundamental rights under Article 19(1)(f) and Article 31. There are two petitioners in each case, the first being the State Trading Corporation of India Ltd. and the second, the Cement Marketing Company of India Ltd. There are also two respondents in each petition, the first of whom is the State of Mysore which through one of its officers, the second respondent, p....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... otherwise provided, a State could not pass a law taxing an inter-State sale or purchase. This provision was deleted by the Constitution (Sixth Amendment) Act, 1956, which came into force on September 11, 1956. The Constitution (Sixth Amendment) Act also amended Article 269, the relevant portion of which after such amendment reads as follows: Article 269(1)-"The following duties and taxes shall be levied and collected by the Government of India .............................................   (g) taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce ........................................................................   (3) Pa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ods from one State to another." The petitioners contend that the disputed sales were of this variety and the respondents, therefore, could not tax them. The question then is, did the sales occasion the movement of cement from another State into Mysore within the meaning of the definition. In Tata Iron and Steel Co., Ltd. v. S.R. Sarkar [1961] 1 S.C.R. 379, 391; 11 S.T.C. 655., it was held that a sale occasions the movement of goods from one State to another within section 3(a) of the Central Sales Tax Act, when the movement "is the result of a covenant or incident of the contract of sale". That the cement concerned in the disputed sales was actually moved from another State into Mysore is not denied. The respondents only contend that the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... later a firm contract with it was made. In making the orders of assessment, the Taxing Officer observed that the firm contracts did not provide for any supplies being made from any particular factory and the supplies had actually been made from factories outside the State of Mysore only to suit the convenience of the supplier, the Marketing Company, and not because of any covenant in the contracts. It is true that the written contracts did not themselves contain any covenant that the supply had to be made from any particular factory but it seems to us that the agreement between the parties was not fully set out in them. In any case each contract was subject to the terms of the permit to which it expressly referred. As it is not in dispu....