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1956 (8) TMI 35

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....the dealer concerned on his turn- over in each year relating to such goods and shall be in addition to the tax to which he is liable under sub-section (1) on his total turnover for the year: Description of the goods Rate of tax for every Indian rupee in the turnover relating to such goods. 1 2 (ix) Tobacco Four annas" and rule 6 of the Travancore-Cochin General Sales Tax Rules, 1950: "The sale of any of the goods mentioned in items (i) to (ix) in section 3, sub-section (2), shall be subject to the tax specified in that sub- section at the stage of sale by the person who in the State is the first dealer in such goods, who is not exempt from taxation under section 3(3)". Section 3(3) mentioned in the Rules relates to dealers "whose total turnover in any year is less than ten thousand Indian rupees" and has no application to the present case. 3.. "Tobacco" is defined in section 2(jj) of the Act as including "snuff, cigars, cigarettes, beedies, tobacco powder and other preparations or admixtures of tobacco" and we are concerned in this case only with products which definitely come within the ambit of that definition. By a notification (No. SRI-4789/51/B. RD) dated 18th July, 1951, the....

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...........once the goods are placed on rail at Coimbatore, the property in the goods passes to our customers and we have no legal control over the goods". We see no reason not to accept this statement or to hold that the property in the goods passed from the company to the petitioner any- where other than at Coimbatore. 7.. We are assured that the procedure followed in railing the goods from Coimbatore to Trivandrum is for the Imperial Tobacco Company of India Ltd., Coimbatore, to take the railway receipts in its own name, then endorse them in favour of the petitioner and post them to his Trivandrum address. There is a full discussion of the cases dealing with the endorsement of railway receipts at pages 37 to 40 of Aggarwala's Commentary on the Indian Sale of Goods Act, 1930. The view that appeals to us is the view expressed in Sheo Prasad v. Dominion of India(1) wherein it is stated: "A railway receipt, therefore, being a mercantile document of title to goods, it is possible to transfer the title in the goods, to the endorsee by mere endorsement. It is, therefore, not possible to accept the contention that a mere endorsement of a railway receipt was not by itself enough to transfer....

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....as inserted by Ordinance No. IV of 1951 which has since been replaced by the Travancore-Cochin General Sales Tax (Amendment) Act, 1951 (Act XII of 1951) and reads as follows: "(1) Notwithstanding anything contained in this Act- (a) a tax on the sale or purchase of goods shall not be imposed under this Act- (i) where such sale or purchase takes place outside the State of Travancore Cochin; or (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territory of India; (b) a tax on the sale or purchase of any goods shall not, after the 31st day of March 1951, be imposed where such sale or purchase takes place in the course of inter-State trade or commerce except in so far as Parliament may by law otherwise provide. (2) The Explanation to clause (1) of Article 286 of the Constitution of India shall apply for the interpretation of sub-clause (i) of clause (a) of sub-section (1)". 10.. The petitioner's contention is that section 26 modifies the concept of sale under the Act and makes the transactions between the Imperial Tobacco Company of India, Ltd., Coimbatore, and the petitioner sales taxable under the Act. Such a co....

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....ales, and the tax liability arising thereon, and after the Ordinance, the exemption based upon Article 286 (2) would no longer be applicable. The conditions of the Ordinance are therefore fully satisfied. "Mr. Subbaraya Iyer, learned counsel for the petitioner assessee, drew our attention to a passage in the judgment of the Supreme Court in The Bengal Immunity case(2), where his Lordship the Chief Justice refers to the fact, that in the Bihar Act, the Explanation to Article 286 (1)(a) was introduced, as an Explanation to the definition of 'sale', the argument being that unless this were done, it could not be said that what might be termed 'the Explanation sales' were sales liable to tax under the Sales Tax Act. We are of opinion, that there is no difference in the legal effect achieved by the different methods of drafting adopted in Madras and Bihar. Section 22, with the Explanation of what an 'inside' sale is, must be read as really part of every provision in the Act, and so read, the same result is achieved as in Bihar." (1) [1953] 4 S.T.C. 133. (2) [1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603. 11.. With respect, we are unable to agree. The wording of section 26, as we understand it....