(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) These revisions are at the instance of the revenue against the orders of the Sales Tax Appellate Tribunal dated 23.12.1993 in Madurai Tribunal Appeals No.702 and 703 of 1992 relating to the assessment year 1989-90 and 1990-91, wherein and whereby the Tribunal has accepted the case of the assessee that the transaction effected by it are covered within section 6(2)(b) of the Central Sales Tax Act and not a local transaction, which is exigible to tax under the Tamil nadu General Sales Tax Act.
2. The facts : The assessee is a dealer in pumps, spares and electrical goods at Madurai. After obtaining orders for the supply of pumps and motors from the dealers within the State, it placed orders with the suppliers in Pune and requested the suppliers to move the goods directly to the places where the ultimate buyers were doing business. The lorry receipts received by the assessee were endorsed in favour of the ultimate buyers. The assessee claimed exemption on the turnover of Rs.1,42,370/- for the assessment year 1989-90 and Rs.1,00,129/- for the assessment year 1990-91 under
section 6(2)(b) of the Central Sales Tax Act, 1956. the assessing officer disallowed the claim of exemption. Aggrieved by the same, the assessee filed appeals before the Appellate Assistant Commissioner in AP No.16 and 15/92, who after taking into consideration all the materials placed before him, held that a turnover of Rs.47,000/- was eligible for exemption under
section 6(2)(b) of the Act and a turnover at Rs.95,370/- was not eligible for the exemption in respect of the assessment year 1989-90. For the assessment year 1990-91, the Appellate Assistant Commissioner confirmed the assessment order and dismissed the appeal. Aggrieved against the order, the assessee preferred an appeal before the Tribunal. The revenue, on its turn, filed an enhancement application in respect of that portion of the order, which has been decided by the Appellate Assistant Commissioner, in favour of the assessee for the assessment year 1989-90 allowing exemption at Rs.47,000/-. The Tribunal, after hearing the parties, and based upon the materials on record, allowed the appeals, by granting exemption claimed under
section 6(2)(b) of the Central Sales Tax Act, in respect of both the assessment years. The correctness of the same is now under challenge in these revisions at the instance of the revenue.
3. The reasons given by the assessing officer for non suiting the claim of exemption, as claimed by the assessee is that the mere endorsement does not constitute a sale in transit. Sale between the dealer and the ultimate buyer had been completed only after concluding the sale, the dealers have issued despatch instructions to the suppliers to despatch the goods, it cannot be claimed that the dealer could get the order from various parties from Tamilnadu and place the order to the suppliers in other States, issue despatch instructions, receive lorry receipt and make an endorsement and then claim it as a transit sale. On that reasoning, it was concluded that the transaction in this case is not a sale in transit as defined under
section 6(2)(b) of the Central Sales Tax Act. The Appellate Assistant Commissioner had accepted a part of the turnover in which the ultimate buyer's name has not been indicated and rejected the part of the turnover in respect of which the invoice indicates the name of the ultimate purchaser. In addition to that, there was some difference between the invoice raised by the supplier from Pune and the invoice raised by the dealer. On that score, the Appellate Assistant Commissioner found that the goods started from Pune and ended with the assessee and thereafter the goods were transferred to the ultimate dealers. Thus, there is a snap in the transaction. The transaction was completed on the goods reaching the assessee and thereafter the goods supplied to the ultimate dealer could not be regarded as a continuous transaction.
4.
section 6(2) of the Central Sales Tax Act lays down that the sale in the course of the interstate trade or commerce of goods of the description referred to in
section 8(3) from one State to another or has been effected by transfer of documents of title to such goods during their movement from one State to another. Any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subjected to tax under the Act. But the proviso to
section 6(2) states that the exemption of such subsequent interstate sales is conditional upon the dealer furnishing to the prescribed authority in the prescribed manner a certificate duly filled and signed by the registered dealer by whom the goods were purchased containing the prescribed particulars. In order to claim exemption, it will have to produce not only 'C' form from the supplier, but also 'E1' form certificate from the dealer. From the provisions it is clear that availing the benefit under
section 6(2) of the Act, second or subsequent interstate sales must have been effected by transfer of documents of title to goods.
5. The factual finding of the Appellate authority that the link was broken when the goods reached the assessee, but for arriving at such a conclusion there was no material. The one and only material on which the Appellate Assistant Commissioner has come to the conclusion was that there was some difference in the description of the goods in the invoice of the supplier from Pune and invoice raised by the assessee after making an endorsement in the document of title - the lorry receipt. The assessee has given the full description of the goods whereas the selling dealer of Pune has not given full description. Mere giving full description of the goods, ipso facto, would not change the character of the transaction. What is relevant in this case is whether the goods have reached the ultimate buyer on the assessee transferring the document of title to the goods, when the goods were in transit. In this aspect, there is no finding whatsoever either by the assessing officer or by the Appellate Assistant Commissioner to the controversy. The Tribunal has recorded a clear finding to that effect. The original lorry receipt in respect of the sale in favour of the assessee and destination point at Madras and those lorry receipts which are the documents of title were endorsed and transferred to the ultimate purchaser of the assessee.
6. The requirement of section has been considered by the Division Bench of this Court in the case of Duvent Fans Pvt. Ltd. v. State of Tamilnadu, (1999) 113 STC 431, wherein it was observed that what is material for the purpose of
section 3 of the Act is the movement of goods from one State to another, as a result of sale or purchase, and it is not essential that a direction for the movement of the goods be expressly set out in the contract. It can also be incidental to the transaction of sale. The same is the opinion of the Gujarat High Court in the case of State of Gujarat v. Haridas Mulji Thakker, (1992) 84 STC 317.
7. Having regard to the facts, as stated above, we are of the view that there is absolutely no material to take a different view than that of the Tribunal, so as to come to a conclusion that the movement of the goods has been broken at the end of the assessee and the assessee has subsequently sold the goods to the ultimate dealers in Tamilnadu and as such the assessee is not entitled to the benefit of
section 6(2) of the Act. This revisions are dismissed. No costs.
(K.R.P.,J.) (M.M.S,J.) 18.12.2009 Index : Yes Internet : Yes mf K.RAVIRAJA PANDIAN, J.
and M.M.SUNDRESH, J.
T C (Rs) No.2328 and 2258 of 2008 18.12.2009