FATEH CHAND BHUREMAL Vs. COMMISSIONER SALES TAX

JUDGEMENT

(1.) THIS is a reference under section 11(4) of the U.P. Sales Tax Act (hereinafter referred to as the Act).

(2.) THE dealer is a firm which carries on business at Hapur, District Meerut. During the assessment year 1956-57, the dealer collected gur from various parties in the State of Uttar Pradesh and consigned the same to destinations outside Uttar Pradesh. The railway receipts were made in the name of self. These railway receipts were subsequently sold to local parties. The dealer claimed exemption from tax in respect of the turnover of such transactions amounting to Rs. 1,13,524, on the ground that such sales were exempt from tax under article 286 of the Constitution. The Sales Tax Officer did not accept this contention. The contention, however, was accepted on appeal by the Assistant Commissioner (Judicial), Sales Tax. According to him, the gur purchased by the dealer had been consigned to places outside U.P. and the railway receipts were sold to local dealers by endorsement who took the delivery of the goods outside the State. In his opinion, such sales were covered by article 286 of the Constitution. The department went up in revision. The Judge (Revisions) has reversed this finding relying upon a decision of this court in Bansi Lal Ram Swaroop v. Commissioner of Sales Tax, U.P. [S.T.R. No. 195 of 1957 decided on 20th November, 1962 (Allahabad High Court)], where on similar facts it has been held that sales take place within Uttar Pradesh where property in goods passes to the buyers and there is no element of sale in places outside Uttar Pradesh where the delivery is taken.

(3.) IN order to give effect to this mandate of the Constitution, section 27 was added in the U.P. Sales Tax Act. That section reads :