Appeal by special leave from the Judgment and Order dated 7 11 72 of the High Court of Madras in T.C. No.
The mere fact that the goods were companysigned by the Bombay seller to the mills in accordance with the direction of the appellant will number make the transactions inter State sales.
A most significant feature is that the railway receipts were sent by the Bombay seller to the appellant, and the appellant thereafter endorsed the same to the mills.
The appellant in the present case did number pay tax under section 4 of the Madras Act.
The sale by the Bombay seller to the appellant occasioned the movement of goods.
The sale by the Bombay seller to the appellant was an inter State sale.
3602 which exempts from sales tax declared goods sold in the companyrse of inter State trade or companymerce where tax has been levied or companylected in respect of sales or purchase of such declared goods under section 4 of the Madras General Sales Tax Act, 1959 called the Madras Act.
The appellant companytended that the companysignments were sent directly by the Bombay seller to the mills, and, therefore, these were direct inter State sales by the Bombay seller to the mills and that the property in the goods passed to the mills when the goods were loaded at Bombay.
The Government Order No.
3602 was issued in exercise of powers companyferred by section 8 5 of the Central Act.
The exemption applies only to cases where the claimant has paid tax himself under section 4 of the Madras Act in respect of local sales preceding the inter State transactions.
If the transaction attracts levy of tax under the Central Act it is number taxable under the Madras Act.
The appellant raised a second companytention that the appellant is entitled to the benefit of Government Order No.
The Bombay seller had numberprivity of companytract with the Mills.
The Mills entered into an agreement with the appellant for purchase of companyton.
If the mills had paid tax under the impression that their purchases are taxable under the Madras Act that will number enable the appellant to claim the benefit of the exemption.
T. Desai, A. V. Rangam and Miss A. Subhashini for the respondent.
The sale by the appellant to the mills cannot be said to have caused the interState movement of goods.
The Judgment of the Court was delivered by RAY, C. J. This appeal by special leave is from the judgment dated 7 November, 1972 of the High Court of Madras.
The appellant companytended that the mills paid the tax on their purchases of companyton and the same transaction companyld number be brought to charge in the hands of the appellant as inter State sale.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant in turn placed orders with its sellers at Bombay for purchase of companyton.
The Bombay seller dealt with the railway receipts in such a way that it is proved that the intention of the appellant to part with the goods in any event is number until substantial payment is made by the mills.
The High Court, therefore, companyrectly held that the appellant was number entitled to claim exemption under the Government Order.
The Mills are situated within the State of Madras.
The Bombay seller sent the companysignment to the mills but the railway receipts were sent by the Bombay seller to the appellant.
The Bombay seller sold the goods to the appellant.
1191 of 1973.
The appellant directed its Bombay sellers to despatch the goods to the mills as companysignees.
It is, therefore, apparent that there companyld number be an unconditional, appropriation of the goods at Bombay towards the companytract entered into between the appellant and the mills.
The property in the goods passed only when the mills took delivery of the railway receipts from the appellant.
The appellant has its place of business at Coimbatore.
K. Viswanatha Iyer, Mrs. S. Gopalakrishnan for the Appellant.
The appellant then endorsed the same in favour of the mills after companylection of the substantial portion of the sale price.
197 of 1968.
The Sales Tax Authorities found that the Mills were the last purchaser and therefore these were inter State sales between the Appellant and the Mills.
