ARCOT MILLS LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) Three textile mills in this State arranged for import of Egyptian cotton from the UAR (United Arab Republic) on the basis of their actual user's import licences. The petitioner purchased the cotton from them. The question in this revision is whether, for purposes of the Tamil Nadu General Sales Tax Act, 1959, the said purchases can be held to have taken place not in this State, but in the UAR.

(2.) The petitioner claimed before the taxing authority that the goods arranged to be imported from the UAR were still lying in the UAR ports when the petitioner entered into its contracts of purchase with the three importing mills in the State. It was accordingly urged that the purchases took place only in the UAR.

(3.) This claim was negatived by all the authorities. The Tribunal, in particular, rejected the claim as not proven. The petitioner has relied on certain letters written by the importing mills, which were stated to recite the terms of the agreements of sale between them and the petitioner. The Tribunal, however, recorded a finding that these letters cannot be accepted as genuine, but must be held to have been fabricated later. The letters were supposed to have been written within a matter of days of the importing mills getting into their hands the import licences. According to the Tribunal, it was improbable that the petitioner could have entered into a bargain with the importing mills so soon after their having obtained the licences and even before the shipments had left the UAR ports. The Tribunal noticed internal evidence in the correspondence itself to enable them to infer that it must have been a subsequent concoction. The assessing authority had pointed out in its order of assessment that the documents relating to the imports between the Egyptian cotton merchants in the UAR and the three importing mills in this State had not seen the light of day in the assessment proceedings. The Tribunal found that even the letters and the invoices made out by the importing mills in the petitioner's favour in respect of these purchases were not found entered in the mills' stationery meant for those purposes but in loose sheets of paper. On these and other considerations, the Tribunal rejected the petitioner's claim that the petitioner had entered into contracts of purchase at the time when the goods were even then lying in the UAR.We could easily dispose of the petitioner's present revision by treating the Tribunal's determination as based on its view of the petitioner's evidence, or rather, of the absence of evidence. We may legitimately desist from interfering in revision with the decision of the Tribunal for the excellent reason that it is a decision on facts and the Tribunal had ample materials for rendering its findings on facts. We, however, wish to go into the legal issue raised by the petitioner, because it is one of considerable importance, and it bears on the question of the precise situs of the purchases of Egyptian cotton in this case, even accepting, at face value, the facts pleaded by the petitioner.