TaxTMI 
TaxTMI 
TaxTMI 
2005 (1) TMI 644
X X X X Extracts X X X X
X X X X Extracts X X X X
....roduce (Regulation of Trade in Abnus Leaves) Rules, 1970 (for short, "the Rules"), the beedi leaves can be transported only under a valid permit, as per the pre-determined route to the destination. Any deviation in transportation, contrary to the transport permit, is not permissible. It is further the case of the appellant that it purchased beedi leaves under various auction bids and the quantity so purchased was directly transported by it from the forest depots in the Andhra Pradesh to Sholapur of Maharashtra State. It is further submitted that various depots, where the appellant had purchased beedi leaves, were quite away from the appellant's place of business at Kamareddy in Andhra Pradesh. Appellant's office at Kamareddy is established only to make purchases of beedi leaves and arrange their transport to the factory at Sholapur. Therefore, beedi leaves at no point of time are taken to Kamareddy, but are directly dispatched to the factory in Maharashtra. In the year 1989-90, the appellant, according to it, under a mistake, reported taxable turnover of ₹ 1.07 crores and paid tax on the purchase of beedi leaves, which had been directly dispatched from the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cording to the appellant, the findings of the Appellate Deputy Commissioner were categorical that the purchases were inter-State in nature and, therefore, the Commercial Tax Officer had to pass a consequential order and allow refund to the appellant to the extent of taxes paid in both the years. When the case was pending, the respondent-Commercial Tax Officer issued show cause notice dated November 14, 1994 proposing to revise the order of Appellate Deputy Commissioner and restoring the order of the Commercial Tax Officer for both the assessment years 1989-90 and 1992-93. In the meantime, the final assessment for 1992-93 was made by the Commercial Tax Officer on March 30, 1996. He did not follow the order of Appellate Deputy Commissioner. Therefore, the appellant filed appeal against this order before the Appellate Deputy Commissioner, Secunderabad, on April 22, 1996. As such, it is claimed that the notice by the Commissioner proposing revision had become unnecessary. In response to the revision notice issued by the respondent, the appellant filed its objections dated October 16, 1994 and December 16, 1995, oral arguments were also advanced and written submissions were filed on May....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the State at one time, and yet another time it claimed that the transactions were inter-State purchases and these replies were contrary to each other. In one of the replies, the appellant had stated that the office at Sholapur of Maharashtra State was its branch office, while in another it is stated that the office at Sholapur of Maharashtra State was "head office". On facts, the Commissioner came to the conclusion that the office of the assessee at Kamareddy of Andhra Pradesh was not an agency, but a branch office. He also did not believe that the transactions effected by the assessee were agency transactions on behalf of a non-resident principal. After analysing the records and also the Rules, the Commissioner came to the conclusion that the delivery had taken place at various godowns in the State of Andhra Pradesh. The goods were moved from the forest godowns in the State of Andhra Pradesh, at the instance of purchaser, after taking the delivery. According to him, since the delivery had been taken in Andhra Pradesh, it was immaterial whether there was any further movement of goods or not, particularly for the seller. As far as the seller is concerned, the transaction....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s to despatch the goods are independent of the instructions to purchase. There is a break between the purchase and despatch of goods. It would not be an inter-State purchase. An out-State principal may first instruct his commission agent within the State of U.P. to purchase the goods on his behalf and to await his further instructions. Depending upon the market conditions and other circumstances, the ex-State principal may instruct his agent in the State either to sell the goods within the State or to despatch the goods beyond the State. If such were the case, Sri Sehgal would have been right in saying that the State of U.P. was competent to tax the purchase by the respondent-dealer. But that is not the case here on the facts found by the appropriate authorities." 6.. So in terms of this judgment, it is clear that if the goods moved from one State to another State, in pursuance of an agreement of sale and the sale is completed in the other State, it is an inter-State sale. It is also clear from the judgment that if there is a stipulation expressed or implied in the agreement of sale regarding movement of goods from one State to another, and if goods, in fact, moved from one ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh Court was challenged before the Supreme Court. After consideration of section 3 of the Central Sales Tax Act, 1956, while relying on the judgment of the Supreme Court in Commissioner of Sales Tax, U.P. v. Bakhtawar Lal Kailash Chand Arhti [1992] 87 STC 196, the Supreme Court in Co-operative Sugars (Chittur) Ltd.'s case [1993] 90 STC 1 came to the conclusion that in order to constitute an inter-State sale what was important was whether movement of goods and sale are inseparably connected. It held: "If we examine the facts of this case in the light of the above observations, it would be clear that the purchases made by the appellant are inter-State purchases. The appellant was permitted to purchase sugarcane in Coimbatore and Pollachi taluks only with a view to and exclusively for the purpose of transporting to its factory in Kerala. Whatever was purchased was transported to the appellant's factory in Kerala. It must, therefore, be held that this is a case where the movement of goods was occasioned by sale by the farmers or by the purchase by the appellant, whichever way one looks at it. The movement of the sugarcane from Tamil Nadu to Kerala is the incident of, and....