1960 (11) TMI 102

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....o, buys his tobacco from a wholesale merchant resident within the State of Madras, who holds a licence under L-5. The assessee's seller, the wholesaler, buys tobacco both within the State of Madras and also outside, particularly in Andhra. The wholesale merchant has no L-5 licence to store his purchases in Andhra State. What he does is to employ a commission agent in Andhra to buy tobacco on his behalf and to get it bonded in the warehouse of the commission agent, for which the commission agent holds a L-5 licence. Purchases are effected through the representatives of the wholesaler sent over to Andhra. Subsequently whenever the wholesaler requires tobacco to be sent over to the State of Madras the commission agent sends that tobacco. That ....

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....e first purchaser within the State of Madras. The assessee's seller, the wholesaler, bought the tobacco in Andhra. It may be that he bought the tobacco for eventual consumption in Madras. The evidence disclosed that out of the purchases effected by the wholesaler in Andhra and kept in the bonded warehouse of the commission agent, the commission agent was in some cases instructed to sell a portion of the tobacco within the State of Andhra itself. These purchases at any rate could not be said to be for consumption within the State of Madras. What section 22 of the Act requires is not only that a sale or a purchase should be for consumption within the State of Madras, but that the delivery in Madras should be the direct result of the sale or p....