TaxTMI 
TaxTMI 
1965 (12) TMI 110
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....e Act." 2. The question was referred in the following circumstances. The appellant, hereinafter referred to as the assessee-mills, carries on the business of manufacturing and selling sugar and is registered as a dealer under the provisions of the Act. During the previous year relevant to the assessment year 1948-49, the assessee-company had sold sugar to parties who carried on business outside Uttar Pradesh and also delivered the same outside Uttar Pradesh. It also sold sugar to parties who carried on business inside Uttar Pradesh but the sugar was despatched to stations outside Uttar Pradesh in compliance with the instructions issued by the buyers. The assessee-mills submitted an application under section 5 of the Act, in Form VII, prescribed by the Uttar Pradesh Sales Tax (Temporary) Rules, 1948, claiming 50% rebate on the sales of sugar delivered outside Uttar Pradesh. The Sales Tax Officer allowed rebate in respect of the sales of sugar to parties who carried on business outside Uttar Pradesh but rejected the claim for the sales which were made to parties carrying on business inside Uttar Pradesh. In respect of the assessment year 1948-49 there were four assessment orders c....
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....de U.P. by the same party which purchased the sugar from the mills". Then on the facts he held that the selling agents, Tandon Bros., who entered into a contract with the assessee- mills for sale of the goods were really the buyers and although the goods were despatched outside Uttar Pradesh in accordance with the despatch instructions of some contract arrived at between Tandon Bros., and the party to which the goods were ultimately delivered, the assessee-mills had not entered into the contract with the parties to which the goods were despatched outside Uttar Pradesh. He further repelled the argument that despatch instructions formed part of the contract. 6. The assessee-mills then filed four applications under section 11 of the Act, but the Judge (Revisions), Sales Tax, rejected the applications on the ground that no question of law arose. The High Court, however, directed the Judge (Revisions) to state a case under section 11 of the Act. A consolidated statement of the case was referred. The judge (Revisions) drawing up the statement of the case was not the judge (Revisions) who had disposed of the revision applications. In the statement of the case certain further facts were....
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....ll be deemed to have been made when a (torn) carriage or a forwarding note has been given to the Station Master of the station. The seller shall not, (torn) circumstances whatsoever, be responsible for non-despatch, or refusal to despatch or delay in despatch or any (torn) mistake in despatch by the Railway. Where (after tender as aforesaid) any delay in despatch occurs, the buyer shall (torn) delivery of the goods without any claim against the seller on account of such delay or the consequence thereof (torn) delay in despatch is due to non-supply of wagons or due to booking restrictions, the seller, shall, if required by the (torn) obtain from the factory a letter stating the cause of the delay. Where owing to restriction of whatsoever nature imposed by carriers on despatches, seller is unable to despatch according to the route requested by the buyer, then seller shall have the right, after giving to the buyer three days' time to despatch by the cheapest avail- able route at seller's sole discretion to the destination required by the original despatch instructions. Within the period of three days above- mentioned, buyer may change the destination provided the (tor....
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....s of the year shall not be construed as adverse remarks as to the condition of the goods or its packing. If any complaint as to quality, condition, quantity or weight is referred to arbitration and an allowance is awarded in respect thereof, the buyer shall retain the goods and such allowance shall be deducted from the price and be refunded by the seller." 8. The High Court, in view of its finding that the delivery was contracted to be made ex-factory, the factory being within the State of Uttar Pradesh and the contract not containing any condition requiring the assessee to deliver the goods outside Uttar Pradesh, held that rebate was not admissible under section 5. The High Court said that its detailed reasons were contained in its judgment in Lord Krishna Sugar Mills v. Commissioner, Sales Tax, U.P. Sales Tax Reference No. 263 of 1954-Judgment delivered on March 19, 1963. In that case Desai, C.J., held that the obligation to deliver goods outside Uttar Pradesh must arise only from a term in the contract, and in the absence of such a term it could not be said that the goods were to be delivered outside Uttar Pradesh. The learned Chief Justice further observed as follows: ....
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.... inside Uttar Pradesh and the assessee-mills would not be entitled to rebate under section 5. 11. The Madras High Court had occasion to consider a similar question in India Coffee and Tea Distributing Co. Ltd. v. The State of Madras [1959] 10 S.T.C. 359. It held that the word "delivery" in section 5 of the Madras General Sales Tax Act, 1939, which exempts from taxation sales of tea "if the sale is for delivery outside the State and delivery actually was made" did not include anything which the law deemed "delivery" but was restricted to physical delivery of the thing sold. In coming to this conclusion, Subrahmanyam, J., observed: "In deciding whether the word 'delivery' in section 5(v) includes delivery in law, we have to have regard to the objects of the Legislature in enacting section 5(v). The object obviously was the promotion of the export of tea. The Legislature intended that where tea was exported from the State for being delivered outside the State, the sale which resulted in such export should be exempt from taxation. That object would not be wholly achieved if we hold that delivery of documents of title in the State of Madras would make the sale liable....