By C. B. Thakar Advocate G. G. Goyal
Janak Vaghani Chartered Accountants
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Inter-State Sales – Delivery of Goods – Against Allotment Letter – Subsequent Dispatch of Goods Outside the State – Local Sale – Purchase Tax Payable – At Last Point, Section 3(a) of The Central Sales Tax Act, 1956 and Item 74 of Schedule I of The Tamil Nadu General Sales Tax Act 1959.
FACTS
The appellant company purchased rubber from State Trading Corporation against allotment letter. Delivery thereof was given within the State of Tamil Nadu by STC and the appellant dealer subsequently dispatched it to its branches outside the State of Tamil Nadu. Since goods were sent by the appellant dealer outside the State, the STC charged CST on such sales to applicant. The enforcement department visited place of business of the appellant dealer and found that delivery is given within the State as such did not accepted claim of inter-State purchase of appellant dealer and levied purchase tax at last point, despite tax paid by selling dealer under the CST Act treating it as inter-State sale. The Tribunal confirmed the order of lower authorities. The appellant filed revision petition before the Madras High Court against the order of Tribunal.
HELD
The terms and conditions of allocation of natural rubber shows that they are general in character, that whenever there is a movement of rubber in the course of inter-State trade, as an incidence of sale, certainly, as per the clause, central sales tax provisions would stand attracted. Therefore, the inclusion of a clause referring the to furnishing of C forms as regards inter-State sale in the general conditions, per se, would not in any manner, speak on the character of the transaction. There is nothing on the record to show that the parties intended on the facts of the case that allotment was intended to result in the movement of goods to various branches of the assessee. The application of the delivered rubber to any particular unit outside the State is a matter of choice and the discretion of the assessee and the seller, at no point of time, was involved in this. On a reading of facts of the case, the High Court held that the assessee after having purchased the goods had issued dispatch instruction for movement of goods to other State. Thus there was no link between the purchase and dispatch. It is difficult to say that the movement is nothing but an inter- State sale. Accordingly, the claim of applicant for inter-State purchase was rejected by the High Court and confirmed the levy of purchase tax as last point purchase. However, since selling dealer had charged CST @4% and remitted to the Government and rate of purchase tax is 5%, the State was directed to give necessary adjustment in respect of four per cent tax paid by selling dealer STC as the payment made in respect of the assessment made on the assessee as last purchaser and that the balance tax payable by the assessee would be only to the extent at one percent. Accordingly, the High Court dismissed the applications with above direction for adjustment of CST paid by selling dealer towards payment of purchase tax by the appellant.
