TEXTOOL COMPANY LIMITED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS is an appeal by the assessee against the order of the Board of Revenue imposing tax on the disputed turnover of Rs. 6, 39, 244.76 under the Central Sales Tax Act, 1956 (Act 74 of 1956), for the assessment year 1964-65. The Board purported to act on the principles laid down by the Supreme Court in Mod. Serajuddin v. State of Orissa. In effect what it said was that there were two sales in the case, one by the appellant-assessee to the Calcutta buyer and the other by the Calcutta buyer with the foreign buyer. The Board of Revenue did not consider the nature of the sale by the assessee to the Calcutta buyer. The relevant part of the order of the Board of Revenue is in these terms :

(2.) THAT there are two sales in the case in regard to the transactions represented by the turnover of Rs. 6, 39, 244.76, which we have referred to, there can be no dispute. The assessee had sent invoices to the Calcutta buyer. Though the bills of lading were taken in the name of the assessee after putting the goods on vessels either in the Madras Port or in the Cochin Port, these bills of lading were endorsed in favour of the Calcutta buyer and were sent to the bank to be delivered to the Calcutta buyer against payments to be made by the Calcutta buyer. There were contracts of sale between the assessee and the Calcutta buyer. The Board of Revenue has not considered what is the nature of these sales. The Board was right in applying the principle of the decision of the Supreme Court in Mod. Serajuddin v. State of Orissa But the further questions arises whether there were any inter-State sales which were exigible to tax under the Central Sales Tax Act, 1956.

(3.) THE contract of sale, as we have said, is between the appellant before us and the Calcutta buyer, and there can be no doubt that the movement of the goods was caused by this contract of sale. If as a result of this contract of sale there was movement from one State to another, the transaction will clearly become exigible to tax under the Central Sales Tax Act, because that would be an inter-State sale. But if the goods are moved as a result of a contract from one part of the State to another part of the State, there cannot be any inter-State movement, which is essential element for the purpose of treating the transaction as an inter-State one exigible to tax as an inter-State sale.