COMMISSIONER OF SALES TAX Vs. ALLWYN COOPER

JUDGEMENT

(1.) IN this reference under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter called the Act), at the instance of the Commissioner of Sales Tax, the question, which we have been asked to answer, iswhether, on the facts and circumstances of the case, the disputed sales of manganese amounting to Rs. 2,77,976. 45 P. were sales in the course of inter-State trade and commerce or were intra-State sales ?

(2.) THE assessee, Allwyn Cooper, who does the business of selling manganese, was assessed to sales tax under Section 18 (3) of the Act for the period from 1st October, 1957, to 30th September, 1958, on his turnover of the sales of manganese of the value of Rs. 2,77,976. 45 P. During the assessment proceedings, he claimed that this entire turnover was of sales in the course of export of manganese out of India, and that in any case the sales were inter-State sales and, therefore, not liable to be taxed under the Act. This objection was negatived by the taxing authorities. In second appeal, the Sales Tax Tribunal (the Board of Revenue), however, accepted the contention of the assessee that the sales were in the course of inter-State trade or commerce and, therefore, could not be assessed to sales tax under the local Act. On this view, the Sales Tax Tribunal remanded the matter to the Sales Tax Officer for assessment under the Central Sales Tax Act, 1956.

(3.) THE Tribunal has found as a fact that the turnover of Rs. 2,77,976. 45 P. was turnover of the sale of manganese by the assessee to M/s. Ram Bahadur Thakur and Co. , Nagpur, M/s. Jyoti Bros, of Calcutta, and M/s. B. P. Khemka Private Ltd. , Calcutta, under written agreements concluded between the assessee and the purchasers. Under the contract entered into with M/s. Ram Bahadur Thakur and Co. , Nagpur, manganese ore was loaded into wagons at Katangjhiri railway-siding located in the State of Madhya Pradesh for being despatched to Gondia, in the State of Maharashtra, and the price payable by the buyer was F. O. R. Katangjhiri railway-siding. The agreement, however, contained the stipulation that the "first net weight at Gondia weigh-bridge shall be final and binding on both the parties for the purposes of payments" and that the last balance payment of the price would be made "by the buyers to the sellers after entire loading of the stock and on receipt of weight from Gondia weighbridge. " The agreement concluded between the assessee and M/s. Jyoti Brothers of Calcutta also contained a similar condition with regard to loading of ore and its despatch to Gondia, and the "first weight of Gondia weigh-bridge" being the basis for final accounts. The sales to M/s. B. P. Khemka Private Ltd. , Calcutta, were under two agreements, which inter alia provided for despatch of manganese ore to Vishakhapatnam Port and for payment of certain price by the buyers per long ton of the ore, which included railway freight from Katangjhiri railway-siding to Vishakhapatnam Port. Under one of these agreements, the last balance of the price of the goods was to be paid after the loading, weighing and despatch of the ore to the port. The other agreement made the last balance of the price payable after the receipt of the goods "in the plots of the buyers at the port". These stipulations about the despatch of ore to Gondia in two cases, and to Vishakhapatnam Port in the other two cases, leave no doubt that the transport of manganese ore from the State of Madhya Pradesh to Gondia and Vishakhapatnam outside the State was under the contracts of sale concluded between the assessee and the buyers. These sales were, therefore, clearly in the course of inter-State trade as pointed out by Venkatarama Ayyar, J. , in Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 S. C. R. 603.