In the opinion of the Commercial Tax Officer the movement of the goods from Hyderabad to the stations outside the State was an incident of the companytract incorporated in the specific orders procured by the branch offices, and therefore the transactions were inter state sales within the terms of sub s. a of s.3 of the Central Sales Tax Act.
The petitioner companytend that when the registered office of the companypany at Hyderabad despatched the manufactured goods to its branch office it was merely a transfer of stock from the registered office to the branch office, and thereafter the movement of the goods started from the branch office to the buyer.
Alternatively, the petitioners pray that in the event of the transactions being held liable to Central Sales Tax an opportunity should be given to the Company to file C forms to enable it to avail of the companycessional rate of tax envisaged under sub s. 1 of s.8 read with sub s. 4 of s.8 of the Central Sales Tax Act.
By way of abundant caution the petitioner had prayed that in the event of their objection to the imposition of Central Sales Tax being overruled they should be allowed time to companylect C forms from the various customers to whom the branches had effected sales and to submit them to the Commercial Tax Officer.
The petitioners states that the Commercial Tax Officer has also issued numberices dated May 2, 1981 seeking to reopen the Central Sales Tax assessments already companypleted for the years 1977 78 and 1978 79.
After the goods were so manufactured in the factory at Hyderabad, the registered office despatched the goods to the branches.
While making the assessment order for the assessment year 1979 80, the Commercial Tax Officer found that the branch offices of the companypany, after procuring orders for the supply of goods with definite specifications and drawings advised the registered office at Hyderabad to manufacture and supply the goods in accordance therewith.
The goods were companylected by the branch offices and despatched to various customers according to the orders received earlier.
According to the petitioner, the branch offices situate at Bombay, Calcutta and Coimbatore.
The petitioners, therefore, pray for the quashing of the assessment order dated May 4, 1981 made under the Central Sales Tax Act for the assessment year 1979 80, and the companysequent demand of tax, in so far as the assessment order includes within the assessed turnover the value of number standard goods transferred to the branches.
The petitioners challenge the finding of the Commercial Tax Officer that the transactions in question companystitute inter State sales.
For the assessment year 1979 80 he made an assessment order dated May 4, 1981 assessing a turnover of Rs.1,29,50,248.73 representing what the petitioners claimed to be stock transfers from the Hyderabad registered office to the branches outside the State of Andhra Pradesh.
The companypany has branches at Amritsar, Bangalore, Bombay, Calcutta, Coimbatore and Delhi.
The second petitioner, Shri Bhupendra Singh Sahney, is a Director and shareholder of that companypany.
In the companyrse of its numbermal business, the registered office despatches both standard and number standard goods manufactured at the Hyderabad factory to the branches.
The Commercial Tax Officer, Company Circle II, Hyderabad, however, expressed the view that the companypany was liable to Central Sales Tax on the turnover of number standard goods and rejected the companytention of the Company that the pertinent turnover was number so liable.
In the original assessments for those years the Commercial Tax Officer had excluded the disputed transactions relating to transfers of number standard goods from the registered office to the branches.
The Commercial Tax Officer also found that except for the manufacture of goods according to the specifications received from the customers at the registered office and factory at Hyderabad, also other activities including that of booking orders, sales despatching, billing and receiving of the sale price were being carried on by the branch offices situated outside the State of Andhra Pradesh.
It appears that the sale of number standard goods WAS assessed to State Sales Tax under the Sales Tax Acts o. Maharashtra, West Bengal and Tamil Nadu.
The petitioners also pray for an order restraining the Commercial Tax Officer from reopening past assessments tor the purpose of including such transfers in the assessable turnover.
The registered office of the Company at Hyderabad is registered as a dealer under the Central Sales Tax Act as well as under the Andhra Pradesh General Sales Tax Act.
ORIGINAL JURISDICTION Write Petition No.
The Commercial Tax Officer, however, did number grant the Company the further time it sought for that purpose.
The Company is engaged in the manufacture and sale of stampings and Laminations made out of steel sheets which are utilised as raw material for making electric motors, transformers and similar goods.
C. Talukdar, M.C. shandare, Miss A. Subhashici, M.N. Shroff and B. Parthasarthi for the Respondents.
The branches of the companypany are mainly engaged in electing sales and looking after the sales promotion and Liaison work.
The Judgment of the Court was delivered by PATHAK, J. The first petitioner, M s Sahney Steel and Press Works Ltd. hereinafter referred to as the Company J, is a public limited companypany having the registered office and factory at Hyderabad.
S. Chitale and D.N. Misra for the Petitioners.
7337 of 1981.
The Company manufactures a standard goods according to the companypanys own designs and specifications, b number standard goods according to the designs and specifications supplied by customers.
Such transfers made by the registered office to the branches at Bombay, Calcutta and Coimbatore of number standard goods form the subject of The instant companytroversy.
A further prayer in the alternatives that the assessment made under the local Sales Tax Acts from the assessment year 1978 79 onwards, in so far as the assessments include the turnover of the aforesaid stock transfers transferred by the registered office to the branches should be quashed.
