CHESEBROUGH PONDS INC Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) These revisions relate to a group of assessments under the Central Sales Tax Act, 1956. The assessee is a well-known manufacturer and dealer in face powder, having its head office and manufacturing unit at Madras and branches at Bombay and other places. A common point arises in all these revisions, although they related to different assessment years. A department of the Government of India, known as Canteen Stores Department, which is part of the Defence Ministry, placed orders for the purchase of the goods manufactured by the assessee. The order were placed by them with the Bombay branch of the assessee. The orders, when received by the Bombay branch, were forwarded by that branch to the head office at Madras. The head office then consigned these goods by lorry to the Bombay branch warehouse, mentioning in the lorry way-bill, that the goods had been despatched against orders placed by the Canteen Stores Department. When the goods reached Bombay, they were cleared by the Bombay branch and immediately supplied to the Canteen Stores Department, after raising invoices in terms of the orders already placed. This course of transaction characterises all the amounts of turnover which are now in dispute in these revisions.

(2.) The assessee's case before the assessing authorities as well as before the Sales Tax Appellate Tribunal was that the transactions concerned cannot be regarded as sales in the course of inter-State trade, chargeable to tax under the Central Sales Tax Act. The assessing authorities as well as the Tribunal rejected the assessee's contention.

(3.) In these revisions, Mr. Narayanamurthy, the learned counsel for the assessee, submitted that while the goods certainly moved from the factory, or head office, of the assessee at Madras to the Bombay branch warehouse, such movement cannot be regarded as having any connection with any particular order or orders placed by the Canteen Stores Department. His endeavour was to urge that the goods moved from Madras to Bombay on what were described as "stock transfers". Such stock transfers, it was submitted, cannot be brought within the charging provisions of the Central Sales Tax Act, since they were not occasioned by the purchase orders of the Canteen Stores Department, and cannot be regarded as sales in the course of inter-State trade and commerce.