JUDGMENT Rajes Kumar, J.
1. Present four revisions under Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") are directed against the order of the Tribunal dated 17th, May, 2006 relating to the assessment years 1997-98 and 1998-99 both under the U. P. Trade Tax Act and the Central Sales Tax Act respectively.
2. Applicant claimed to have carried on the business in its own account as well as in Commission Agency. During the year under consideration, applicant claimed to have made purchases for and on behalf of Ex-U. P. Principal and after purchasing the same, dispatched to the Ex- U. P. Principal. Before the Assessing Authority, these transactions were examined and Show-cause-notices were issued stating therein that in respect of the purchases, written orders were not produced. It was stated that the orders were received through Telephone, but no entries were made relating to such expenses in the Cash-book, it had been admitted on oath that the persons of the Ex- U. P. Principal normally cames to the Shop and made payments. The Assessing Authority found that the dealer did not have a Telephone nor any expenses relating to the Telephone were entered in the Cash-book. It was also found that the payments from the said Ex- U. P. Principal have not been received through draft or Cheque, but it was received in cash. It was also found that in 6-Rs, details of the seller have not been properly mentioned. On these considerations, the Assessing Authority was of the view that the applicant failed to prove that the goods were purchased on the instructions of the Ex- U. P. Principal and accordingly, levied the tax on the purchases treated to have made on own account under the U. P. Trade Tax Act and under the Central Sales Tax Act treating the sales as inter-State sales. First Appeals filed by the dealer were rejected. Applicant filed Second Appeals before the Tribunal. The Tribunal by the impugned order rejected all the four appeals. The Tribunal observed that before it the purchase orders, 6-R, 9-R, Cash-book, Ledger, Dispatch Register etc. were not produced for verifications, the purchases made on behalf of Ex- U. P. Principal, could not be proved. The Tribunal further observed that no order book was produced and no details when the goods were purchased and dispatched were furnished and in 6-Rs complete name and addresses of the Farmers were not mentioned. The payments were received in cash.
3. Heard learned Counsel for the parties.
4. Learned Counsel for the applicant submitted that the entire books of account were produced before the Assessing Authority, which is referred in the assessment orders itself. He submitted the only ground taken by the Assessing Authority was. that the applicant did not have purchase-orders and the applicant was not able to prove that the orders were received on Telephone, inasmuch as. no expenses in this regard, were found entered in the cash-book and ledger and the payments were received in cash and in 6-Rs, complete name and addresses of the Farmers were not mentioned. He submitted that though, the applicant did not have a Telephone, but the orders were received in P. C. O. and the purchases were made on the basis of the orders received from the Ex- U. P. Principal and thereafter, they were dispatched at the destination of the Ex- UP. Principal, therefore, such purchases were in the course of inter-State purchases. The Tribunal has illegally rejected the claim of the purchases for and on behalf of Ex- U.P. Principal in the Purchasing Commission Agency in the course of inter-State purchases.
5. Learned Standing Counsel submitted that the applicant was not able to substantiate that the purchases were made for and on behalf of Ex- U. P. Principal. He submitted that no purchase order or any order-book were produced and even, the applicant did not have any Telephone, therefore, the claim of the applicant that the orders were received through telephone, could not be substantiated. He submitted that the expenses towards telephone were not entered in the cash-book and ledger. He submitted that for the claim of purchases in the course of inter-State purchases, primary consideration is that there should be orders for purchases and its dispatch and in pursuance of such orders or instructions, purchases are being made and the same are being dispatched at the destination of the Ex- U. P. Principal and if the dealer claims that it made purchases on the instructions of buyer and dispatched the goods at its destination, burden lies upon the dealer to prove it and in case if it fails to substantiate the claim, purchases cannot be said to be in the course of inter-State purchases. He submitted that on the facts and circumstances of the case, applicant failed to prove that the purchases were made for and on behalf of Ex- U.P. Principal
6. Having heard learned Counsel for the parties and have perused the order of the Tribunal and the authorities below.
7. In the case of C.S.T v. Bakhtawar Lal Kailash Chandra reported In 1992 IPTC.' page 971, the Apex Court observed as follows:
If we examine the facts of this case in the light of the above principles, it would be clear that the purchases were made by the respondent as a commission agent on behalf of the Ex- U. P. Principals and the goods purchased under each of the purchases were duly dispatched to such principals. It is found that such dispatch took place not later than three days from the date of purchase, as soon as the railway wagon was available. The purchase of goods and their dispatch to ex-State principal were parts of the same transaction. The movement of goods from Uttar Pradesh to another State was occasioned by and was the result or the incident of the purchase. It was the consequence of the purchase. Such movement of goods, though not proved to have been expressly stated in the contract of sale, was yet held to have been agreed upon between the parties. We must emphasize that the question whether a sale/purchase is an inter State sale/purchase depends on the facts of each case. The principles are well settled, it is only a question of application of these principles to the facts found in each case.
Sri Sehgal, learned Counsel for the State of Uttar Pradesh contended that the purchases made by the respondent-dealer in the State of U. P. were completed purchases. Once a purchase in complete in the State of Uttar Pradesh, he contends, it is immaterial whether the goods are later dispatched to another State or sold within the State. For the purpose of the U. P. Sales Tax Act, it is enough that a sale or purchase takes place within the State, the subsequent movement of the goods is irrelevant, says the counsel. We find it not possible to agree. As held by Mathew, J. in Oil India Co. Ltd. v. Superintendent of the Taxes and Ors. 1975 UPTC 335 : 1975 (3) SCR 797, quoted approvingly in Khosla and Co., "a sale which occasions the movement of goods from one State to another is a sale in the course of the inter-State trade, no matter in which State the property in the goods passes." Even if the goods move in pursuance of an agreement of sale and the sale is completed in the State in which the goods are received, it will be an inter-State sale, as explained by this Court in Balabhagas Hulaschand v. State of Orissa .
Situation could have been different if the respondent-dealer had purchased the goods on behalf of the Ex- U. P. Principals in the first instance and thereafter in pursuance of subsequent instructions dispatched the goods. In such an event the instructions to dispatch the goods are independent of the instructions to purchase. There is a break between the purchase and dispatch of goods. It would not be an inter-State purchase. An out-State Principal may first instruct his commission agent within the State of U. P. to purchase the goods on his behalf and to await his further instructions. Depending upon the market condition and other circumstances, the ex-State Principal may instruct his agent in the State either to sell the goods within the State or to dispatch the goods beyond the State. If such were the case, Sri Sehgal would have been tight in saying that the State of U. P. was competent to tax the purchase by the respondent-dealer. But that is not the case here on the facts found by the appropriate authorities.
8. In view of the law laid down by the Apex Court referred hereinabove, for a transaction being in the course of inter-State purchases, there should be an instruction or order of the Ex- U. P. Principal to purchase and dispatch the goods outside the State of U. P. and both purchase of goods and the dispatch to Ex- U. P. Principal should be the parts of the same transaction. The movement of goods should be occasioned or as a result of purchases. It has also been held that if the there is a break between the purchase and the dispatch of the goods, it would not be inter-State purchases, thus, it has to be established that there was an order or instruction from the Ex- U. P. Principal to purchase and dispatch the goods outside the State of U. P. In the circumstances, it is necessary to prove that there was an order of Ex- U. P. Principal to purchase and dispatch the goods. To prove the above condition, burden lies upon the dealer. Admittedly, no written orders of the Ex- U. P. Principal were produced to substantiate the claim. It was the claim that the instructions were received through the telephone, but it was found that the applicant did not have a telephone, therefore, claim of the applicant that the orders were received through the telephone, also could not be substantiated. Applicant submitted that the orders were received through P. C. 0., but no evidence had been furnished to substantiate the claim and the expenses towards the telephone etc. were not found entered in the cash-book or ledger. Thus, the primary condition for being be inter-State purchases namely the existence of the orders or instructions from the Ex- U.P. Principal to purchase and dispatch the goods, could not be established. In the present case, the Assessing Authority, Joint Commissioner (Appeals) and the Tribunal held that the dealer is not able to prove that it had received the orders from the Ex- U. P. Principal for the purchases and dispatches and purchases were made on the basis of their orders. Findings of the Tribunal are the findings of fact which cannot said to be perverse or without any basis on the facts and circumstances of the case referred herein above.
9. In the result, all the above four revisions fail and are, according dismissed.