GOVINDRAM LAXMAN PRASAD Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE facts of the case are simple and are not in dispute. The applicant-firm is a dealer in bidis, having its head office in Mathura in U.P. and its branch office in Sagar, where bidis are manufactured. The branch office is a dealer registered under our Sales Tax Act (hereafter generally referred to as the Act or our Act) and his grievance in theses proceedings is that the Sales Tax Commissioner has declined to deduct a sum of Rs. 82,114-7-6 from the taxable turnover for the period of assessment 1st June, 1947, to 12th November, 1947, (in fact, the very first quarter after the coming into force of the Act). The deduction was claimed on the ground that sales of bidis of this value were not effected by the dealer at all, much less were they effected in this Province (as it then was). The technique of the firm's operations is that the head office at Mathura receives and accepts orders from customers outside the Province and instructs the branch office at Sagar to consign goods, as per orders received, to the customers' stations, but all addressed to self. The branch office carries out instructions and sends bills prepared at cost price (including, of course, packing and similar charges) along with the relative railway receipts to the head office. The head office prepares bills for payment to customers (adding profit and other charges to the cost price bills received) as per terms agreed upon and sends the bills along with the railway receipts to customers through a bank or by V.P.P.

(2.) ON these facts, it is contended on behalf of the applicant that

(3.) ADOPTING this plain meaning, the Sales Tax Commissioner has held that (a) though the contract of sale was made outside the Province and the actual transfer of property in the goods also took place outside the Province, (b) the sale should be deemed to have taken place in the Province, as the goods were in the province at the time the contract of sale was made.