ENGLISH ELECTRIC COMPANY OF INDIA LIMITED Vs. DEPUTY COMMERCIAL TAX OFFICER ALANDUR DIVISION MADRAS 16

JUDGEMENT

(1.) THE petitioners are seeking for the issue of a writ of prohibition restraining the first respondent from taxing or including in the proposed assessment order of theirs for the year 1965-66, the sum of Rs. 29, 68, 749. 97 on the ground that it ought not to be included in the assessable turnover. THE petitioner is a public limited company having its registered office at Calcutta and branches at Bombay, Delhi, Madras and Lucknow. THE main factory of the petitioner-company is at Madras.

(2.) THE various branches of the company have been registered both under the local as well as the Central Sales Tax Acts in the various places of its business as a dealer within the meaning of the said Acts. THE disputed turnover in this writ petition relates to the proposed levy of Central sales tax by the first respondent in the State of Madras in respect of sales of which the contracts to sell goods were made by and with the branches of the company as above at bombay, Delhi, Calcutta and Lucknow. We shall refer in detail to the manner and method adopted by the branch at Madras and the other branches of the company outside Madras presently in concluding the impugned transactions. THE contention of the petitioner is that orders were booked by customers with the out-of-State branches and the goods were sent by the Madras branch or works so as to implement the said contracts. On this it is stated that the sales are not inter-State sales within the meaning of section 3 (a) of the Central Sales Tax Act, 1956 (Act 74 of 1956 ). THE petitioner reserves certain other matters for appropriate action by it at the required stage, but it is, in this writ petition, canvassing the propriety of the notice dated 21st february, 1967, issued by the first respondent proposing to treat the turnover of Rs. 29, 68, 749. 97 as assessable turnover for the assessment year 1965-66. THE petitioner has referred to certain documents by way of illustration to sustain its case that the turnover in question is not assessable as if it were so in the course of inter-State sales. THE petitioner's case is that if the first respondent proceeds to include the turnovers above as assessable turnover, it would be put to Serious loss and prejudice. Hence the request for a rule in the nature of a writ of prohibition. In the counter-affidavit filed on behalf of the State, the first respondent avers that on an examination of the relative documents concerning the transactions in question it was found that the goods had moved from the State of Madras as a result of the orders placed by the customers with the assessee's branches in places outside the State. THE first respondent, therefore, justifies the position that the turnover is assessable under the Central Sales Tax Act as relating to inter-State sales, and therefore the writ of prohibition asked for is premature and cannot be granted. THE petitioner though having alleged certain other factors in support of the issue of the rule, has not pressed the same when the case was taken up for hearing, because of the decision in W. Ps. Nos. 84 and 983 of 1967 etc. (Since reported as Sitalakshmi Mills Ltd. , Tirunagar, and Others v. THE Deputy commercial Tax Officer, No. IX, Teppakulam New Colony, Madurai , and Others We shall now notice the relevant facts on which the relative contentions of the parties rest.

(3.) HEREIN also a reference is made to the indent and the reference to Asha Metal Works in the caption of this letter is indicative of the fact that the goods are to move from Madras for the benefit of Asha Metal works. The Bombay office repeat that the goods are to be consigned to them but the real substance of the above letter is that the railway receipt and the above documents are to be sent to them for disposal. One other significant feature of the above letter is that the petitioner is directed to send the goods to Bhandup Railway Station which is the place of business of the buyers. The petitioner immediately after despatch of the goods from Madras office has advised the Bombay office of such despatch and sent what they termed as contents/advice note to that effect. This note contains the amount that has to be collected by way of freight, the price as agreed upon and the goods train in which the goods have been despatched as also the number of the railway receipt. When the goods reach Bhandup and the railway receipt is sent to the Bombay office, they apparently draw up an invoice for the supply of the goods. The invoice so prepared suggests that the goods have been delivered to the buyers from the stores of the Bombay office. In some other invoices, however, we do not find this recitation. On the other hand, it states that the invoice is on account of the goods which have been delivered to the buyers by the clearing agents of the Bombay office. The above moans operandi has resulted in the buyers securing the specific goods from the State of Madras through the intervention of the Bombay office; but the goods have been admittedly despatched from Madras by the petitioner, to the place of business of the buyer.