KELVINATOR OF INDIA LIMITED Vs. STATE OF HARYANA

JUDGEMENT

(1.) This appeal by Special Leave by M/a Kelvinator of India Ltd. is directed against the judgment of Punjab and Haryana High Court whereby that court answered the following question referred to it by the Sales Tax Tribunal Haryana in favour of the department and against the appellant:

(2.) The matter relates to the assessment year l965-66, i e. the period from April 1, 1965 to March 31, 1966. The appellant campany has a factory at Faridabad in Haryana. It manufactures refrigerators, deep freezers, compressors and other similar articles. The factory went into production in 1964. Its registered office and sales office are at 19A, Alipore Road, Delhi. The appellant has godowns in Delhi having full staff of godown keepers and clerks. The appellant is a registered dealer under the Punjab General Sales Tax Act, 1948 and the Central; Sales Tax Act, 1956. The registration has been done at Faridabad. Refrigerators and other articles are manufactured by the appellant under a collaboration agreement with an American company known as Kelvinator International Corporation. The refrigerators and other articles manufactured by the appellant are marketed under trade marks "Kelvinator,', "Leonard" and "Gem',., The entire sale of refrigerators, compressors and spare parts in l964 was made to Spencer and Co. Ltd. at Delhi. Such transfers were accepted as genuine by the sales tax authorities. In respect of these sales the department did not take the stand that they were inter-State sales or that the movement of goods from Faridabad to Delhi was occasioned by reason of sales made to Spencer Co. Ltd.

(3.) On April 26, l965 the appellant entered into a distribution agreement with Spencer and Co. Ltd. in respect of refrigerators and other products having Kelvinator trade mark. Similar distribution Agreements were entered into with Blue Star Engineering Co. (Bombay) Pvt. Ltd. on September 15, 1965 in respect of Leonard refrigerators and on December 11, l965 with General Equipment Merchants Ltd. in respect of Gem refrigerators. The agreement with Spencer and Co. was to take effect from April 1, 1965 and the other two agreements from the dates on which they were entered into. The terms of the agreements were substantially similar, except in certain matters with which we are either not concerned or to which reference would be made hereinafter. The relevant clauses of agreement dated April 26, 1965 are as under: