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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE VEERASWAMI & THE HONOURABLE MR. JUSTICE RAMAPRASADA RAG
Cement Distributors Private Limited, Dalmiapuram - Appellant
Versus
Deputy Commercial Tax Officer, Lalgudi, and Others - Respondent
Case No : Writ Petition No. 1394 of 1967
Decided On : 16 August 1968
SALES TAX - INTER-STATE SALES - Central Sales Tax Act, 1956, Section 3(a), Section 4(2), Section 47 - The judgment discusses the applicability of the Central Sales Tax Act, 1956, specifically focusing on the sale of unascertained goods and the determination of the situs for jurisdiction to tax. The court emphasizes the distinction between a contract for the sale of specific or ascertained goods and a contract for the sale of unascertained goods, and the rules for ascertaining the intention of the parties as to the time at which the property in the goods passes to the buyer. The judgment also highlights the provisions of the Central Sales Tax Act, 1956, regarding the deemed place of sale and the circumstances when a sale shall be deemed to take place inside a State. The court's decision is based on the interpretation of these legal provisions and their application to the facts of the case.
Fact of the Case:
The petitioner, a company incorporated under the Indian Companies Act, is a registered dealer under the Madras General Sales Tax Act, 1939, and the Central Sales Tax Act, 1956. The case involves the sale of cement from the petitioner's branch office in Calcutta to purchasers in the Calcutta area, with shipments made from the Port at Cuddalore to Calcutta. The petitioner's contention is that the sales in question cannot be brought into the net of taxation by the State of Madras as the situs for such jurisdiction has been shifted by reason of the sale being an out-of-State sale in relation to the State of Madras. The petitioner also argues that the impugned order has not been passed within the prescribed period of five years as provided for by section 16(1) of the Madras General Sales Tax Act.
Finding of the Court:
The court finds in favor of the petitioner, ruling that the sales in question cannot be subjected to taxation by the State of Madras as they are deemed to be out-of-State sales. Additionally, the court holds that the impugned order has been passed without jurisdiction and is unenforceable due to being beyond the prescribed period of time.
Issues: The issues involve the applicability of the Central Sales Tax Act, 1956, to the sale of unascertained goods and the determination of the situs for jurisdiction to tax. Additionally, the case addresses the timeliness of the assessment order under the Madras General Sales Tax Act.
Ratio Decidendi: The court's decision is based on the interpretation of the provisions of the Central Sales Tax Act, 1956, regarding the sale of unascertained goods, the deemed place of sale, and the circumstances when a sale shall be deemed to take place inside a State. The court also emphasizes the importance of adhering to the prescribed period for passing assessment orders under the Madras General Sales Tax Act.
Final Decision: The rule nisi is made absolute, and the order impugned is struck down as one having been passed without jurisdiction, besides being illegal. The writ petition is allowed with costs.
RAMAPRASADA RAG, J.
The petitioner, a company incorporated under the Indian Companies Act, having its registered officer in New Delhi, is a registered dealer both under the Madras General Sales Tax Act, 1939, and the Central Sales Tax Act, 1956
"AUTHORISATION
The State Trading Corporation of India Ltd. Office of the Regional Cement Officer, 119/120, Armenian Street, Madras-1. Dated 22nd November, 1961.
WEST BENGAL
State Quota
Authorisation No. RCO/DI/AU-WBST/818.
Name of suppliers : The Cement Distributors (P.) Ltd., Dalmiapuram P.O.,
Tiruchirapalli District, Madras State.
You are authorised to sell the quantity of cement mentioned below, under this authorisation. The sale will be a direct deal between yourself and the purchaser.
---------- Name and address Name of the Quantity Name of Railway of the person in Cement Station to Remarks whose favour Factory which cement is authorisation required to to be booked is issued supply cement 1 2 3 4 5
--------- The Cement Distri- Allotment for the period butors (P.) Ltd., IV/1961 "Stephen House", Dalmiapuram --------------------------- Mission Road, Factory 9, 000 Metric tonnes (Nine Calcutta. thousand tonnes only) for distribution to Calcutta area as directed by the Regional Cement Officer, S.T.C., Calcutta.
--------- Full details of the purpose for which and the For consumption in place at which cement will actually be Calcutta area. consumed. Reference :-
i. Ministry of C. & J., New Delhi, No. Gem-10(10)/61 dt. 26-9-1961.
ii.
iii.
For The State Trading Corporation of India Ltd. Sd/- Regional Cement Officer.
Copy to :-
1. The person named in Col. 1. (By Registered Post)
The authorisation enables the petitioner to sell the quantity of cement mentioned therein to the person in whose favour the authorisation is issued. It is said that such a sale will be deemed to be a direct sale between the petitioner and the purchaser. It is however significant that the name of the purchaser is not to be found in this authorisation. On the other hand, the person in whose favour the authorisation is issued is none else than the branch office of the petitioner. Before issuing this authorisation order or at or about that time, the State Trading Corporation of India Limited issued another authorisation enabling the actual consumer or purchaser to secure such quantity of cement allotted to him by them. One such authorisation or allotment letter is dated 4th November, 1961. This authorisation form is addressed to the branch office of the petitioner at Calcutta and they are authorised to sell the quantity of cement mentioned in the allotment letter to the person in whose favour the authorisation is issued. In the illustration cited, the person so authorised was the Executive Engineer, Howrah Division Construction Board, 94, Chittaranjan Avenue, Calcutta. A quantity of 230 metric tonnes was allotted to the Executive Engineer. The authorisation or allotment letter should also be extracted for purposes of easy appreciation. It runs thus :" *
AUTHORISATION FORM The State Trading Corporation of India Ltd. Office of the Regional Cement Officer, Calcutta 21.
Ranji Stadium, Eden Gardens. Dated : November 4, 1961.
State Quota. WEST BENGAL
Authorisation No. STC/R/CO/CAL/61/IV/WB-G/31. Period IV/61. Name of suppliers : M/s. Cement Distributors Private Limited, Stephen House, Mission Row, Calcutta-l.
You are authorised to sell the quantity of cement mentioned below under this authorisation. The sale will be a direct deal between yourself and the purchaser.
---------- Name and address Name of the Quantity Name of Railway of the person in Cement Metric Station to Remarks whose favour Factory Tonnes which cement authorisation to supply is to be booked is issued cement 1 2 3 4 5
--------- Executive Engineer, Delivery ex- Price ruling Howrah Division Calcutta on the Construction Board, Dalmiapuram 230 M/T. Jetty/Docks of despatch 94, Chittaranjan from the Avenue, Calcutta. Factory
(Two hundred and thirty M/Tonnes only)
Full details of th
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