LIPTON LTD Vs. STATE

JUDGEMENT

(1.) THE applicants are well-known tea merchants. They have a Branch Office in Nagpur, which controls distribution and sales of tea not only in this State but also in which was known during the period to which this assessment relates, the Central India Agency. The dispute relates to supplies made by them to their customers (wholesalers and retailers) in the Central India Agency during that period, namely, 1st June, 1947, to 30th September, 1947. The technique of supply may be described in the words of Shri S. K. Naidu, the applicants' representative :

(2.) THERE is no dispute about the correctness of the facts stated by the applicant's representative in describing the technique of supply. Briefly, he customers in Central India place their orders with the applicants' office at Nagpur either direct or through the latter's travelling or canvassing agents. The goods to be supplied are situated at no time either at Nagpur or at any other place in the Province. They are stocked at the depots or godowns at certain places in Central India itself and the stocks at these depots or godowns are replenished, as and when necessary, direct from the Calcutta godowns of the applicants. On receipt of an order from a customer in Central India, the Nagpur office instructs the person in charge of one of the depots or godowns in Central India to despatch the goods. He despatches the goods and sends the railway receipt to the Nagpur office, which endorses the railway receipt to the customer and sends it to him together with the bill (prepared at the Nagpur office itself) taking care, however, in diverse ways, to recover the amount billed, before actual deliveries are made. Accounts concerning these supplies are all kept at the Nagpur office, though separately from the accounts concerning supplies made in Province itself.

(3.) THE first question to examine is whether the contract of sale in the process of supply described in paragraphs 1 and 2 can be considered to be one for specific or ascertained goods. Admittedly, the order received and accepted at Nagpur is "for so many cases of specified brands of tea." At that stage, the contract obviously is not one for specific or ascertained goods. Thereafter the Nagpur office passes on the order to a depot in Central India, which appropriates the goods (which are certainly in a deliverable state) to the contract and hands them over to the carrier (namely the Railway Company) for the purpose of transmission to the buyer. At this second stage, the goods have undoubtedly become specific or ascertained, but the appropriation is not unconditional, nor has the delivery to the carrier been made, without reserving the right of disposal. Next we find the Nagpur office endorsing to the customer the railway receipt received from the supplying depot in Central India after recovering, in most cases, the price of the goods in advance. At this third stage, when, on recovery of the price, the railway receipt is endorsed to the customer, the right of disposal in the goods already delivered to the carrier cases to be reserved and the appropriation of the goods to the contract becomes unconditional, the buyer's assent to the transaction being implicit. There can be no doubt that it is at this stage that property in the goods is transferred. All this, however, determines only the time when property in the goods has passed. The mere fact that property has passed at a time when a certain act was done in Nagpur does not make the transfer one that has taken place in Nagpur. At the time when the act resulting in the transfer of property was done in Nagpur, the goods were somewhere in Central India. It is at that place that property can be considered as having passed, though, at the time it passed, a very necessary act to effect the transfer was performed in Nagpur.