TaxTMI 
TaxTMI 
1966 (9) TMI 108
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.... Act (No. 9 of 1939) (hereinafter referred to as "the Act ") in respect of certain sales of cotton. The respondents were registered dealers in cotton, including kappas, groundnuts and cotton seeds with their head office at Bellary and branch offices at a number of places. They were also licensees under section 8 of the Act in respect of cotton. They made various purchases of cotton at their places of business and subsequently sold them to different parties. Amongst these were a number of persons who were not resident within the area to which the Act applied. The question arose as to who was liable to pay the sales tax in respect of those transactions of sale of cotton in which the cotton had been sold by the respondents to non-residents. Wh....
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....onsignee could get cotton bales at the other end even without any payment to the banker. The moment the appellants consigned the goods, they will have lost complete control and dominion over the cotton thus des- patched. Further, non-resident foreign buyers who obtained the necessary transport permit under the Cotton Control Order, 1950, actually insure the cotton bales as the owners thereof and transmit the same from Bellary to the destination. This is so even in cases where the appellants themselves have consigned the goods in their own name, the consignees being themselves. All these facts clearly go to show that the sales are completed at Bellary and the non- resident foreign buyers in whose favour the property in the goods had been tra....
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....ordinate authorities directing payment of sales tax by the respondents. That order was upheld by the High Court of Mysore when the revisions against the orders of the Tribunal came up for decision before it. These appeals before us coming up by special leave are directed against the above order of the High Court. We may mention that the revisions came up before the High Court of Mysore, because the area, in respect of which the dispute arose, was originally within the State of Madras, but, on Reorganisation of States, came within the State of Mysore. The law applicable to sales in the year in question, however, continued to be the Madras Sales Tax Act (9 of 1939), and that area came to be designated as Madras area of the State of Mysore. ....
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....at they were already the owners of the cotton bales as soon as they were given for trans- mission to the common carrier. In this connection, a question also arose whether the sales by the respondents to those non-resident parties were sales in the course of inter-State trade. What are the sales in the course of inter-State trade was explained by this Court in Tata Iron and Steel Co., Limited, Bombay v. S.R. Sarkar and Others [1961] 1 S.C.R. 379; 11 S.T.C. 655., where clauses (a) and (b) of section 3 of the Central Sales Tax Act, 1956, were interpreted as follows: "In our view, therefore, within clause (b) of section 3 are included sales in which property in the goods passes during the movement of the goods from one State to another by....
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....ule, and not the situs of the sale of cotton itself. We are unable to accept this submission. The language of the rule is clear that the tax is to be levied from the dealer who buys it in the State and is the last dealer not exempt from taxation. The test laid down thus is as to who buys it in the State and not who is in the State for purposes of buying the cotton. The mills outside the State were no doubt carrying on their main business of manufacture of yarn or cloth outside the State; but so far as the act of purchase of these cotton bales was concerned, it was carried out by them within the State. It is to be noticed that in the rule the expression used is "the dealer who buys it in the State and is the last dealer not exempt from taxat....