STATE OF TAMIL NADU Vs. BOMBAY METAL DEPOT

JUDGEMENT

(1.) THIS tax revision case has been filed under section 38 of the Tamil Nadu General Sales Tax Act by the State of Madras against the order of the Sales Tax Appellate Tribunal dated 4th December, 1973, holding the assessee to be not liable to tax under the Central Sales Tax Act on a turnover of Rs. 7, 39, 353. 14. The assessee is a dealer in non-ferrous metals. In the course of the assessment proceedings the assessing officer noticed that the assessee had effected sales to the Executive Engineer (Public Health), Central stores, Ernakulam, Cochin-16, on several dates. The assessee sought exemption from tax on the sales on the ground that these sales were effected by transfer of documents within the meaning of section 3 (b) of the Central Sales Tax Act and that he had filed E-I and D forms in respect of the same. The assessing officer found that the filing of D forms from the Government departments did not satisfy the requirements of the Act as the State Government departments were not registered dealers. Since all the sales were to the Government departments, he issued notices to the assessee asking for its objection to the proposed assessment of the said turnover. The assessee pointed out that there was some pending legislation before the Parliament and wanted the assessment to be deferred till the passing of the said amendment. It questioned also the jurisdiction of the State to assess the said amount to tax. The assessing officer rejected these contentions. He found that the assessee entered into a contract with another entity in Bombay and that the Bombay entity despatched the goods to the respective executive engineers. He considered the sales to be taxable in this State under section 3 (b ). The assessee appealed and the appellate authority was of the view that the assessee had sold goods purchased from Maharashtra while on movement from Maharashtra to Kerala attracting liability to tax under section 2 (b ). The assessee, thereafter, filed a second appeal before the Sales Tax Appellate Tribunal. The Tribunal came to the following conclusions :1. The sale fell within section 3 (a) and the State of tamil Nadu had no jurisdiction to assess the inter-State sale since the goods were not within the State of Tamil Nadu at the time of appropriation;

(2.) SECTION 3 (b) would ordinarily apply to what is commonly known as "bilti" sales in mercantile practice. These sales not being such sales did not fall within the meaning of section 3 (b) of the act; and