TaxTMI 
TaxTMI 
2009 (2) TMI 753
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....rrying out sheltering and service at Jalandhar at the hands and premises of Dada Motor Garage. (ii) Whether evidence on the file does not reveal that the contract of appropriation was between M/s. Dada Motor Garage and Lohia Machines Limited, Kanpur and subsequently, M/s. Dada Motor Garage sold/delivered such goods at its premises at Jalandhar? (iii) Whether M/s. Dada Motor Garage is engaged in inter-State transaction, thereby covering the present case under the PGST Act, 1948. The latest verdict of the Supreme Court in Madras Marine and Co. v. State of Madras [1986] 63 STC 169, dated July 16, 1986 has given a vital importance to the place of delivery of goods. Even where the goods after importing were very much under the supervision and control of custom authorities, and exported from custom frontiers, the levy of sales tax by the State is upheld, the custom frontiers being not the border of another State, but the State Territory (the jurisdiction of the State)?" Facts in brief are that M/s. Lohia Machines Ltd., Kanpur (for brevity, "the company") is a company registered and incorporated under the Companies Act, 1956, which has its registered office at Kanpur. An agreement was ....
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....mited, Kanpur dated May 17, 1984. (3) Proforma invoice No. SCT/84/84-85/140 dated May 17, 1984 worth Rs. 10,102.50. (4) Central Excise Gate Pass, GP.I. dated May 18, 1984. (5) Final invoice No. SCT/C-84-85/008 dated May 18, 1984 worth Rs. 10,102.50. (6) G.R. No. 27384 of M/s. Kataria Carriers, Kanpur dated May 18, 1984. (7) Photocopy of Transit Insurance Policy No. 22220/20184/00025 dated June 16, 1984 of M/s. Oriental Fire & General Insurance Co. Ltd." The illustration of Shri Muni Lal was taken to understand the mechanism adopted for transfer of scooters from the company at Kanpur to the consumer in Punjab. Shri Muni Lal had applied for purchase of a Vespa scooter through the company at Kanpur through a prescribed form for purchase, which was named as "application form". The form contained an acknowledgement slip in token of having received the application form. Acknowledgement slip was sent by the company at Kanpur to Shri Muni Lal at Jalandhar. The allotment was later on issued to him by the company at Kanpur along with a pro forma invoice with an intimation of dispatch of scooter from Kanpur to Jalandhar. The scooter was assigned to him in the allotment letter itself by....
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....and the Tribunal reversed the view taken by the appellate authority as well as the Assessing Authority. The Tribunal recorded categorical findings on two issues (a) "the correspondence as regards purchase and sale of the scooter was between Shri Muni Lal of Jalandhar and Lohia Machines Ltd., Kanpur; and (b) the price charged from Shri Muni Lal is ex-factory price at Kanpur and not ex-showroom price at Jalandhar. Also there is no payment to Dada Motors Garage, Jalandhar by Shri Muni Lal for handling charges. In other words, the transaction is of a composite nature between Shri Muni Lal of Jalandhar and Lohia Machines Ltd., Kanpur, in terms of the total price to be charged at factory gate at the time the scooter was specifically assigned to Shri Muni Lal with engine number and chassis number and is also cleared by the Central Excise". On the basis of the aforesaid findings of fact, the Tribunal held that this is a sale at factory and not at the showroom of the assessee, Dada Motors, where the physical delivery of the scooter was given to Shri Muni Lal. The Tribunal also placed reliance on a judgment of the Calcutta High Court rendered in the case of Lohia Machines Limited, Kanpur v. ....
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....e trade has three essential ingredients: (i) there must be a contract of sale, incorporating a stipulation, express or implied, regarding inter-State movement of goods; (ii) the goods must actually move from one State to another, pursuant to such contract of sale; the sale being the proximate cause of movement; and (iii) such movement of goods must be from one State to another State where the sale concludes. It follows as a necessary corollary of these principles that a movement of goods which takes places independent of a contract of sale would not fall within the meaning of 'inter-State sale'. In other words, if there is no contract of sale preceding the movement of goods, obviously the movement cannot be attributed to the contract of sale. Similarly, if the transaction of sale stands completed within the State and the movement of goods takes place thereafter, it would obviously be independently of the contract of sale and necessarily by or on behalf of the purchaser alone and, therefore, the transaction would not be having an interState element..." In the earlier decisions rendered in the cases of State of Karnataka v. B.M. Ashraf & Co. [1997] 107 STC 571; [1997] 8 SCC....
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....ithin the meaning of section 3 of the CST Act. Once the aforesaid factual and legal position is clear then there is hardly any doubt that the question of law raised in the instant reference has to be answered against the Revenue and in favour of the assessee. Thus, the first question of law is answered against the Revenue and in favour of the assessee. The answer to the second question would also be against the Revenue and in favour of the assessee because there is no evidence on record to prove a contract of appropriation between the company at Kanpur and the assessee, Dada Motors, who might have sold the goods at their premises at Jalandhar. The last question may now be considered which highlighted that the judgment of the honourable Supreme Court in the case of Madras Marine and Co. v. State of Madras [1986] 63 STC 169 has given vital importance to the place of delivery of goods for the purpose of levy of sales tax by the State. In that case the assessee were dealers in stores and were doing business in the State of Tamil Nadu as ship chandlers. In the relevant assessment years they had imported goods from foreign countries in order to supply them as stores to foreign-going ve....
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....use the custom station is within the State of Tamil Nadu. That question might have been relevant if we were considering the case of sale by the transfer of documents of title to the goods as contemplated by section 5 of the Central Sales Tax Act. In the premises we are unable to accept the contentions urged on behalf of the appellants in the civil appeals and also the contentions urged in the writ petition." The question then is whether these principles apply to the facts of the present case or not. The Tribunal has recorded categorical finding that the correspondence as regard purchase and sale of the scooter was between Shri Muni Lal of Jalandhar and Lohia Machines Limited at Kanpur and that the price charged from Shri Muni Lal is ex-factory price at Kanpur and not ex-showroom price at Jalandhar. It has further been found that no payment was made by Shri Muni Lal to Dada Motors Garage, Jalandhar as handling charges. When we search for corresponding findings in the judgment of the honourable Supreme Court in the case of Madras Marine and Co. [1986] 63 STC 169 then no such findings are available showing that the factum of sale had taken place outside the jurisdiction of the State....