TATA ENGINEERING AND LOCOMOTIVE Vs. STATE OF BIHAR

JUDGEMENT

(1.) These two references are under Section 25(3) of the Bihar Sales-tax Act, 1947, at the instance of the assessee company in, regard to two periods, the 23rd October, 1954, to the 31st March, 1955 (M. J. C. 285 of 1962), and from the 1st April, 1955, to the 31st March, 1956 (M. J. C. 284 of 1962). The assessee company being aggrieved by the inclusion of certain transactions as sales in the turnover went in appeal and in revision without any success. They asked for a reference, but that was refused by the Board of Revenue. Thereupon they came with an application under Section 25 (2) of the Bihar Sales-tax Act, 1947 (to be referred hereafter as the Act) and obtained a rule on the 6th May, 1963, calling upon the Board of Revenue to state a case and refer the same to the High Court on the following questions. In M. J. C. 285 of 1962 the question is as follows:

(2.) The assesses is a public limited company incorporated under the Indian Companies Act of 1913 and carries on the business of manufacturing and selling of truck and bus chassis and spare parts thereof to appointed dealers, state transport organisations and individual buyers throughout India. The registered office of the assessee company is in Bombay, but its factory where the truck chassis and the spare parts are manufactured is at Jamshedpur in Bihar. The company appointed several dealers all over India and entered into an agreement with them in regard to the manner of supply of track chassis and spare parts (to be referred hereafter for the sake of convenience as the vehicles) and the arrangement the dealers have to make for resale of those vehicles in their specified territories. No written agreement was there as far as the State transport corporations and organisations or the individual buyers were concerned. During the relevant period, some vehicles were despatched either by rail or by road by the assessee to the purchasers' destination and some vehicles were taken delivery of by the purchasers themselves from the factory and moved on road from Jamshedpur to their respective places. It is in regard to the latter transactions that the controversy arose between the assessee and the sales-tax authorities. About the other kind of transactions, the Board of Revenue was rightly of the opinion that they were sales outside the State, but with a view to eliciting further necessary information in that regard, it directed a remand of the case.

(3.) The assessee's whole case is based upon the restriction provided under Article 286 of the Constitution as to the imposition of tax under any law of any State on certain sales or purchase of goods. That article has now undergone a change by the sixth amendment in 1956; but we are concerned with as it was before the amendment, for the period involved in these two references was prior to the amendment. The article read as follows :