S K SHANMUGAVELU Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) These are two appeals filed by the two assesses under Section 34 of the Tamil Nadu General Sales Tax Act (hereinafter referred to as the Act) against the suo motu revisional orders passed by the Board of Revenue revising the appellate orders of the Appellate Assistant Commissioner, Pollachi, relating to the assessment year 1968-69. Since these tax cases arise out of the common order of the Board of Revenue and the issues involved in them are the same, they are dealt with together.

(2.) The appellant in T.C. No. 784 of 1977 was a dealer in cane jaggery and he reported a total and taxable turnover of Rs. 13,78,024.64 for the year ending 31st March, 1969, in the returns in form A-2. However, the dealer claimed exemption on a turnover of Rs. 6,86,230.36 at the time of check of accounts as being inter-State sales. His claim was not accepted by the assessing authority on the ground that the turnover on which exemption is claimed has not been shown to relate to inter-State sales for the following reasons. There is no prior contract of sale between the assessee and the out-of-State purchaser. That the assessee has not shown to have met the incidental charges for the movement of the goods from this State to the out-of-State purchaser. The assessee himself has not consigned the goods as a result of the prior contract of sale and the goods were delivered only at the assessee's place of business to outside dealers. The non-resident buyers or their representatives had come to the place of the business of the assessee, effected purchase either in cash or credit and moved the goods themselves and the buyers or their agents have signed the bills in token of their having taken delivery of the goods. Though the sale bills in the name of the out-of-State buyers and also the obtaining of C forms are not the deciding factors, this will not convert what was local sale to inter-State sale.

(3.) The assessee preferred an appeal to the Appellate Assistant Commissioner against that portion of the order of assessment which rejected the assessee's claim for exemption in respect of Rs. 6,86,230.36 said to represent the inter-State sales of cane jaggery. The Appellate Assistant Commissioner, however, took the view mainly relying on the production of C forms and the affidavits of the out-of-State purchasers that they took delivery of the goods outside the State, that the assessee had despatched the goods to their destination in pursuance of the contract of sale, and that the turnover relating to Rs. 6,61,395.94 should be taken to relate to inter-State sales. The Appellate Assistant Commissioner mainly relied on the decision of this Court in State of Madras v. Bramhappa Tavanappanavar (Mysore) Private Ltd., Madras-21 [1974] 33 STC 601, wherein this Court has held that though the relevant contract of sale was not produced, the invoices and other correspondence and the C forms would indicate that the assessee had collected the sale price by sending the bill of lading and other documents to indicate that the goods had moved to the out-of-State destination only as an incident of the contract of sale and so the sales could be taken to be inter-State sales. In this view, the Appellate Assistant Commissioner allowed the assessee's claim for exemption.