RUKMINI MILLS LIMITED Vs. GOVERNMENT OF TAMIL NADU

JUDGEMENT

(1.) THIS is an appeal against the order of the Board of Revenue. The appellant-company is carrying on business in manufacturing and sale of yarn in Madurai District within the State of Tamil Nadu. It claimed that it has depots at Bombay, Nagpur, Calcutta and Burhanpur. It also effected sales during the assessment year 1964-65 through these alleged depots in other States as follows : Bombay ..... Rs. 13, 11, 303.09 Burhanpur ..... Rs. 43, 771.00 Calcutta ..... Rs. 18, 95, 807.09 Nagpur ..... Rs. 2, 63, 014.97

(2.) IN the return for this assessment year under the Central Sales Tax Act, the appellant returned only a taxable turnover of Rs. 1, 33, 681.20. But in respect of the above set-out sales, it claimed exemption on the ground that they were depot sales and not inter-State sales. This contention was accepted by the Joint Commercial Tax Officer, Madurai, except in regard to a turnover of Rs. 35, 774.98. Even this turnover of Rs. 35, 774.98 was held as not inter-State sales by the Appellate Assistant Commissioner in appeal preferred by the appellant. It appears, sometime later a team of officers were sent to Bombay, Nagpur, Calcutta and Burhanpur to investigate into the nature of these transactions. Since the facts investigated and the report disclosed that the said transactions were inter-State sales, the Board of Revenue initiated proceedings under section 34 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter called the Act) and indicated its provisional conclusion that the entire turnover of Rs. 35, 13, 896.15, including the turnover of Rs. 35, 774.98 allowed by the Appellate Assistant Commissioner did not represent depot sales but inter-State sales and called upon the appellant to file its objections, if any. After following the prescribed procedure, ultimately, the Board held that the transactions effected through Burhanpur, Calcutta and Nagpur depots were depot sales and not inter-State sales, but so far as the transactions effected through the alleged Bombay depot were concerned, a turnover of Rs. 11, 63, 697 was treated as inter-State sales liable to tax at 2 per cent. It is against this order of the Board of Revenue that the present appeal has been filed.IN this appeal, the learned counsel for the appellant was at pains to show that the transactions were depot sales and not really inter-State sales and, in this connection, he also relied on certain decisions. He had typed an abstract detailing the particulars relating to these transactions which have been held to be inter-State sales. We take one transaction, which is item 15 in the abstract statement furnished by him, with reference to which we proceed to consider the nature of the transaction. It is not in dispute that the other transactions were also similar to this transaction. The particular transaction took place in the following manner : On 5th December, 1964, the appellant wrote to their depot keepers M/s. Kiron Corporation of Bombay, informing them that the appellant will make available for sale 100 cases of R & NF 50 Californian cotton yarn at Rs. 54.50 per 5 kg. ex-mill basis and that the appellant will be able to despatch the same in the month of December in lots of 20 cases every four days. On receipt of this letter M/s. Kiron Corporation contacted the intending buyers and obtained orders from them. One such purchaser was M/s. Keshavlal Talakchand and Co., Bombay, who placed an order on 10th December, 1964, for purchase of the exact quantity of 100 cases at the said rate. The price agreed was Rs. 54.50 per kg. ex-mill plus 1 per cent commission, plus lorry freight, excise duty and sales tax. This order was sent to the appellant and was received by it on 15th December, 1964. The 100 cases were despatched through four lorries, 25 cases each, on 22nd December, 1964, 28th December, 1964, 31st December, 1964, and 2nd January, 1965. The way-bills in respect of these despatches were prepared by the appellant noting the consignee as "self".

(3.) THIS argument is not supported by any factual basis. As we have already seen, in pursuance of definite orders the exact quantity of goods were sent with the intention to deliver the goods to a particular out-of-State purchaser. In these circumstances, we are unable to agree with the learned counsel that there was no appropriation in this State. In fact, we doubt very much whether there was any depot at all for the appellant at Bombay. The evidence does not disclose the existence of any depots where large quantities were stored and as and when orders were received from the local purchasers such quantities were removed from those depots and delivered to them. For the foregoing reasons, we agree with the order of the Board of Revenue and dismiss this appeal with costs. Counsel's fee Rs. 250.