JUDGMENT :-

SRINIVASAN, J. –

The State is the petitioner in T.C. Nos. 100 of 1962 and 255 of 1962 and it disputes the correctness of the order of the Sales Tax Appellate Tribunal made in Tribunal Appeals Nos. 325 and 326 of 1961. The facts are these :

The assessee, Messrs Khosla and Co. entered into a contract with the Director-General of Supplies and Disposals, New Delhi, for the supply of "axle-box bodies". In order to fulfil the contract, the assessee had to enter into contract with the manufacturers in Belgium. The goods were so got manufactured and imported into India and cleared at the Madras Harbour and supplied to certain parties on the instructions of the buyer, the Director-General of Supplies and Disposals, as contained in the contract itself. There was no privity of contract between the Belgium manufacturers and the Government departments who ultimately received the supplies. The manufacturers consigned the goods to the assessee under bills of lading, which, after clearance at the Madras Harbour by the assessee, were despatched for delivery to the ultimate consumers indicated by the Director-General. During the period 1958-59, supplies were made to the stores of the Southern Railway at Perambur and at Tiruchi to the total value of Rs. 1,74,029.50 nP. Of the goods cleared at the Madras Harbour, supplies were also made to the stores in the Mysore State to the value of Rs. 1,32,987.75 nP. While the former were held to be sales within the State of Madras, the latter were held to be sales in the course of inter-State trade assessable under the Central Sales Tax Act. That was the view taken by the department. In appeal, the Tribunal held that in respect of a turnover of Rs. 22,938.75 nP., there was an unconditional appropriation of the goods, and allowed this turnover as covered by sales in the course of import. Against this decision, the State has filed the revision petition T.C. No. 100 of 1962. In respect of the sales to the stores in Mysore State also, the Tribunal held that a turnover of Rs. 40,987.50 nP. bore the character of sales in the course of import and excluded that turnover from assessment. T.C. No. 255 of 1962 has been filed by the State questioning the correctness of this view of the Tribunal.

With regard to the remaining parts of the two turnovers which were held by the Tribunal as assessable in the first case under the Madras General Sales Tax Act, and in the second case under the Central Sales Tax Act, the assessee has filed the revision petitions T.C. Nos. 219 and 220 of 1962. The short contention of the assessee is that even in respect of these turnovers, the correct view to take upon the terms of the correct would be that they are sales in the course of import and exempt from levy of any tax either under the State Sales Tax Law or the Central Sales Tax Law.

The question that has to be decided is accordingly whether on a proper interpretation of the terms of the contract, there was or was not involved therein any sale in the course of import. It is necessary therefore to set out the terms of the contract in some detail.

The contract which followed the acceptance of the tender submitted by the assessee was briefly of this description. It specified the name of the indentor as the Controller of Stores, Southern Railway, Perambur, that is to say, the person whom the goods had to be supplied. It stipulated that the delivery shall be made "in eight months ex your principal's works from the date of receipt of the order and the approved working drawings, that is, delivery in India by 31st July, 1957, or earlier". Clause 10 of the contract specified the place of delivery and the terms thereof. The despatch instructions provided for delivery free to the local consignee, to be despatched by goods train. Clause 12 indicated the consignee as (1) Southern Railway at Perambur Works, (2) Southern Railway, Golden Rock Works, and (3) Southern Railway, Mysore South, together with details of the particular items to be des