TaxTMI 
TaxTMI 
1962 (4) TMI 138
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.... cement factory at Tadepalli in Guntur District, within the limits of the State of Andhra Pradesh. The factory is known as the Krishna Cement Works. The Cement Marketing Company of India are the Sales Managers of the assessee company. That company though separately registered under the Companies Act, as a joint stock company, is a subsidiary of the assessee company. 3. The period covered by the assessment now in dispute is 1st April, 1956 to 30th June, 1956. The transactions of sale involved in the case comprise an aggregate turnover of Rs. 1,72,085-12-7 representing sales effected by the assessee-company from the Krishna Cement Works to buyers outside the State. Out of the total turnover, a sum of Rs. 38,587-13-0 represents sales of cement arrayed by the Cement Marketing Company of India through their offices at Bangalore and Secunderabad to private consumers, and Rs. 1,33,497-15-7 represents the value of cement supplied to Government Departments outside the State under a rate contract made with the Director-General of Supplies and Disposals, Government of India. 4. Before dealing with the contentions raised before us, it will be convenient to consider rite nature of the tra....
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....ubject to the conditions laid down in 7 d. above. But siding or other charges at destination will be on account of and payable by the buyer. 5. There is a note which is in the following terms: Although the prices are on F. O. R. destination basis, our responsibility for any loss, shortage, damage or delay in transit or at destination ceases, once the goods are delivered to the Carriers (Railway etc.) and a receipt is obtained. All claims on these accounts should be preferred against the Carrier concerned. 6. From a consideration of the above terms and conditions of the contract of sale, it is manifest that the liability of the sellers ceases the moment the cement is delivered F. O. R. Works siding in full wagonloads. 7. In his letter to the Commercial Tax Officer, dated 5th May, 1957, the Manager, Krishna Cement Works has explained the course of dealings as follows: The terms of sale in these cases were: a. Delivery of Cement was made free on rails at the siding of Krishna Factory. b. Railway receipt was made out in the name of the purchasers residing outside Andhra State / Pradesh. C. The goods were at the purchaser's risk ....
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....e established before the exemption could be claimed is that there should be an 'actual delivery' of the goods outside the State. If under the terms of the contract, the goods are actually delivered to the buyers within the limits of this State, there could not possibly be a further delivery of the same goods again at the places of destination outside the State. 11. It is argued that the delivery of the goods to the common carrier does not amount to physical or actual delivery of the goods to the buyer. 12. Under Section 39(1) of the Sales of Goods Act, it is provided: Where, in pursuance of a contract of sale the seller is authorised or required to send the goods to the buyer, delivery of goods to carrier, whether named by the buyer or not for the purpose of transmission to the buyer or delivery of the goods to a wharfinger for safe custody is prima facie deemed to be a delivery of the goods to the buyer. The following passages from Benjamin on Sale of Goods (8th Edition) at page 211 and at page 737, are apposite: It is well settled that the delivery of the goods to a common carrier, a fortiori to one specially designated by the buyer, for conveya....
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....ent were made in the course of inter-state trade and that the imposition of sales tax thereon is in consequence ultra vires. The provision applicable is Article 286(2), as it stood prior to the sixth amendment, and it ran as follows: Except in so far as Parliament may by law otherwise, provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce. 18. It is contended on behalf of the assessee-company that the goods were purchased in the course of inter-State trade and that the levy of sales tax on the turnover in question was prohibited by Article 286(2). In order that a sale or purchase might be inter-State, it is essential that there must be transport of goods from one State to another under the contract of sale or purchase. In the Bengal Immunity Co. Ltd. v. State of Bihar, AIR 1955 SC 661 at p. 734 their Lordships of the Supreme Court made the following observations: A sale could be said to be in the course of inter-state trade only if two conditions concur: (1) A sale of goods, and (2) a transport of those goods from ....