TaxTMI 
TaxTMI 
2020 (10) TMI 205
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....ssment Year 2004-05, holding that the inter-State Sales made by the Assessee was taxable as local Sales under the provisions of the TNGST Act:- "(i) Whether the inter-State sales to other States by the petitioner, in pursuance to agreement of sales, is assessable under CST Act, 1956 or TNGST Act, 1959? (ii) Whether the inter-State Sales effected by the petitioner in pursuance to agreement of sale, fall under section 3(a) or 3(b) of the CST Act?" 2. The reasons assigned by the learned Tribunal are quoted below for ready reference:- "As per the Hon'ble Supreme Court Judgment reported in 19 VST 239 to claim sales under E1 sales, the first leg of transaction should necessarily be an interstate sales transactions. T....
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....e State without any existence of interstate movement preceding the sale is only a local sales and C forms cannot be issued for such local sales. Thus it is evident from the above-that as long as the transactions were effected within this State without actual movement of goods to another State at the start of first transaction it is liable to tax under the local TNGST Act only and the subsequent interstate sales made by you is an interstate sales liable to tax at 4% with C form and at 10% without C forms. It is immaterial on the final destination of the goods moved. In simple terms the first leg of transaction should be interstate transaction to qualify for assessment under Central Sales Tax 1956. Hence the claim interstate sales be....
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....ement of goods, the Assessee M/s.National Engineering Industries issued Form E1 in respect of these transactions. Therefore, the conditions in respect of E1 Sales were duly satisfied and the supply of goods had taken place in respect of the pre-existing Contract between M/s.Baynee Trading Company and M/s.Gayathri Trading Company and the goods in question were sold by M/s.National Engineering Industries to M/s.Baynee Trading Company and the Consignee was duly shown in both Invoices and Purchase Orders as of M/s.Gayathri Trading Corporation, Pondicherry. Therefore, necessary elements for inter- State Sale were satisfied and the goods were supplied against 'C' Forms and therefore, the local tax could not have been levied on the Assesse....
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....e view taken by the Tribunal in this case." 4. Mr.Mohammed Shaffiq, learned Special Government Pleader appearing for the Respondent/Revenue fairly submitted that the judgment of the Division Bench of this court would cover the facts of the present case and the learned Tribunal appears to have fallen into error in misconstruing the inter-State sale made by the Assessee as local sale. 5. The Seller in the present case is only M/s.Baynee Trading Company, who made the inter-State Sales and as per the pre-existing contract only the goods were transited by the Assessee to M/s.Gayathri Trading Company of Pondicherry and freight was also borne by the Assessee. In view of this admitted and clear facts, we are of the clear opinion there is noth....