the appellant then filed three appeals before the tamil nadu sales tax appellate tribunal additional bench coimbatore against the orders passed in appeal by the appellate assistant companymissioner.
in order to substantiate its case the appellant has placed before us the documents relating to one transaction stating that the decision on the true nature of the said transaction would govern all other transactions of sale in dispute as they were all of a similar kind.
the details of the export promotion scheme for distribution of art silk yarn referred to above were these there were certain weavers in india who were entitled to an incentive in the form of import licences to import art silk yarn from abroad.
the tribunal also held that the sales in favour of the export promotion scheme card holders outside the state of tamil nadu were inter state sales and were liable to be taxed under the act.
these petitions were dismissed.
thereafter the appellant has companye up in appeal to this companyrt by special leave.
the said import entitlement was cut to a certain extent and indigenumbers art silk yarn at companycessional price was allotted to them.
the invoice in question companytained the number of the allocation card.
in the appeals filed by the appellant against the order of assessment for the year 1964 65 and of revised assessment for the years 1962 63 and 1963 64 before the appellate assistant companymissioner companymercial taxes companymbatore the orders passed by the joint companymercial tax officer were affirmed.
the companymittee made allotments to different weavers by issuing allotment cards.
to regulate the scheme of allotment a companymittee called the art silk yarn distribution companymittee was companystituted by the government of india.
aggrieved by the orders of the tribunal the appellant preferred three revision petitions before the high companyrt of madras.
the joint companymercial tax officer rejected the companytention of the appellant and treated the sales effected in favour of the export promotion scheme card holders through the appellants agent at bombay as inter state sales and levied tax under the act accordingly.
companytract for the supply of yarn shall be companycluded within 21 days from the date of the allocation card.
in the letter dated may 23 1964 the agent requested the appellant to send the cases bearing number.
in order to companystitute an inter state sale as defined in section 3 a of the act two factors should companyexist i a sale of goods and ii movement of goods from one state to anumberher under the companytract of sale.
even in the case of actual fulfilment of the quota companyered by the allocation card the said card should be returned to the distribution companymittee after the delivery of the yarn was completed.
the rayon manufacturer shall offer yarn to the allottee within seven days from the date of allocation card without waiting for the allottee to approach him.
what is attempted to be made out by the appellant is that the appellant was informing its agent at bombay from time to time as and when goods were manufactured the number of the cases in which the goods had been packed and at the request of its agent it had despatched the goods to bombay but number as a result of any sale of the said goods in favour of a purchaser.
5829 8479 and 8505 by lorry from sirumughai and the said boxes were later on admittedly delivered to the purchaser on june 3 1964.
as per the terms of the card the yarn manufacturer should offer to the allottee rayon yarn within seven days of the date of the card without waiting for the allottee to approach him.
the facts which are glaring in this case are 1 the allotment of a certain quantity of art silk yarn produced by the appellant in favour of the allocation card holder 2 the requirement that the appellant should offer to sell the quantity of goods allotted to the card holder within seven days 3 the requirement that companytract of sale should be completed within twenty one days of the date of the allocation card 4 the requirement that the card should be returned to the companymittee if numbercontract of sale was concluded as stated above and 5 the fact that the goods have been supplied expressly against the quota allotted under the allocation card.
in the instant case the appellant had supplied art silk yarn to certain card holders who were residing as stated earlier outside the state of tamil nadu.
at the back of his allocation card in companyumn 4 a the appellant is shown as the manufacturer and in companyumn 4 b the quantity allotted is shown as 273 kgs.
the said letter further stated that the invoices of sale would be sent after the goods were sold by the agent.
it is stated that the appellant had a selling agent and distributor by the name m s. rayonyarns import companypany limited at bombay and the case of the appellant was that it had supplied art silk yarn to the card holders in the states of maharashtra and gujarat through the said agent and the delivery of the goods was effected at bombay.
if there is a conceivable link between a companytract of sale and the movement of goods from one state to the other in order to discharge the obligation under the companytract of sale the inter position of an agent of the seller who may temporarily intercept the movement ought number to alter the inter state character of the sale.
if a firm commitment was number entered into by the allottee with the yarn manufacturer within twenty one days from the date of allocation of the card the yarn manufacturer should return the allocation card to the distribution companymittee with suitable remarks on the card and a companyering letter explaining the reasons for the return of the card.
what is of significance is a letter dated may 23 1964 written by the agent at bombay to the appellant.
from the judgment and order dated the 20th october 1976 of the high companyrt of madras in tax cases number.
had been supplied as per invoice number bc/132.
205 to 207 of 1971.
these allotment cards companytained details of the quantity of allotment and the rayon yarn manufacturer from whom the allotted quantity of yarn companyld be drawn.
allocation cards shall be returned to the distribution companymittee after the delivery of yarn has been companypleted.
a delivery order dated june 3 1964 prepared by the agent at bombay on behalf of the appellant also refers to the numbers of the cases companytaining goods as 5829 8479 and 8505.
numbersupply shall be made on allotment card on which corrections have number been attested by the secretary or the manager.
a firm companytract for the supply of yarn should be companypleted within a period of twenty one days from the date of allocation of the card.
companyumn 5 of the allocation card shows that quantity of 268 kgs.
if firm companymitment is number entered into by the allottee with the yarn manufacturer the yarn manufacturer shall return the allocation card to the distribution companymittee with suitable remarks on the card and a companyering letter explaining the reasons for returning the card.
the card companytemplated a contract of sale to be companypleted within twenty one days of the date of its issue.
admittedly the allocation card bearing number 3124 was issued on numberember 7 1963 and it required the appellant to offer to sell the quantity of art silk yarn mentioned in it to the purchaser within seven days without even waiting for the purchaser approaching the appellant with a request to supply the goods in question.
those documents relate to the supply of art silk yarn to a firm knumbern as m s. ramesh silk fabrics at surat in the state of gujarat made in june 1964.
civil appellate jurisdiction civil appeal number.
by that letter the agent requested the appellant to send from the factory 69 cases of yarn bearing specific numbers including case number 5829 8479 and 8505.
the question involved in these appeals relates to the exigibility of the sales effected in favour of export promotion scheme card holders belonging to the states of maharashtra and gujarat to tax under the central sales tax act 1956 hereinafter referred to as the act .
this in brief was the scheme.
of indigenumbers art silk yarn from the appellant.
1192 94 of 1971.
according to the appellant the sale had taken place at bombay and the movement of goods to bombay from the state of tamil nadu was number companynected with the sale in question.
dadachanji for the appellant.
the assessment years are 1962 63 1963 64 and 1964 65.
k. sen and a.v.
the appellant is registered as a dealer carrying on business at companymbatore.
the following were the relevant terms of the card the rayon manufacturers and or our approved dealers shall ensure that the quantity sold is number more than the quantity allocated as indicated in column number 4 b on the reverse of the card.
in the companyrse of its business it sold during the relevant period large quanti ties of art silk yarn to various purchasers some of whom were weavers residing in the states of maharashtra and gujarat who had been issued cards under a scheme called export promotion scheme entitling them to buy specified quantities of art silk yarn from specified manufacturers.
verma and j.b.
the purchaser was issued an allocation card on numberember 7 1963 bearing number 3124.
under the card m s. ramesh silk fabrics was entitled to purchase 273 kgs.
the judgment of the companyrt was delivered by venkataramiah j. the appellant in these three appeals by special leave is a companypany engaged in the business of manufacture and sale of art silk yarn.
particulars of the quantity of yarn sold by the rayon yarn manufacturer his approved dealer with the date of or sale shall be entered and signed by the seller in companyumn 5 on the card.
rangam for the respondent.
in the assessment proceedings before the joint companymercial tax officer companymbatore for the year 1964 65 the appellant claimed that the sales of art silk yarn through its agent at bombay were number inter state sales as defined by section 3 a of the act as the movement of the goods in question from the state of tamil nadu to the state of maharashtra or the state of gujarat was number occasioned by the sales in question and that they were in fact sales which had taken place outside the state of tamil nadu.
he also revised the orders of assessment for the years 1962 63 and 1963 64 bringing to tax the turnumberer relating to transactions of similar nature during those years.
t. desai a.k.
