1991 (8) TMI 315

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....vember 10, 1978, for the supply of M.S. rex bolts and nuts 45 x 16 mm. 3,000 kgs. for Rs. 16,080 and in both the purchase orders condition 12 stipulates that the supply should exactly conform to the quality of the approved samples and should be correct size and superior quality materials as per the specification as otherwise the supply will be rejected and returned to the appellants at their cost. Clause 14 says that the bill of cost for the above should be presented in triplicate duly original stamped and pre-receipted. So both the purchase orders would show that the purchasers have placed orders with the appellants for manufacture and supply of specific items of goods which were not in existence and as such the goods were of future in nat....

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.... aforesaid facts situation, the correctness whereof has neither been disputed nor doubted before us by the Revenue, is whether it is a case of sale return as held by the Appellate Assistant Commissioner or a case of unfructified sale, as found by the Tribunal. 3.. Clause 12 of the supply order clearly stipulated that the supply should exactly conform to the quality of the approved samples and should be of correct size of superior quality material as per the specifications, and it was also contained therein that otherwise the supply would be rejected and returned to the assessee at their cost. The purchase orders clearly go to show that orders have been placed with the assessees for manufacture and supply of specific items of goods which ....

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....of the goods or subsequent to such delivery. Rejection of goods, on the other hand, is on unilateral transaction governed by the provisions of the Contract Act or the Sale of Goods Act, open only to the purchaser, the time-limit mentioned in that section has no application in the case of rejection of goods because the very act of rejection gave a go-by to the transactions which were in furtherance of supposed sale." The extract noticed above is apposite to the facts of the present case. 4.. This Court also in Peico Electronics & Electricals Ltd. v. State of Tamil Nadu [1990] 78 STC 88 considered the distinction between "sale return" and "unfructified sales" and found that where the turnover in question represented unfructified sales, ....