- (1.) THESE are Tax Revision Petitions preferred by the assessee under S. 23(1) of the Mysore Sales Tax Act, 1957. In S.T.R.P. No. 42/63, which relates to the assessment year 1959 -60, the disputed turnover is Rs. 96,642 -50 and in S.T.R.P. No. 40 of 1963 which relates to the year 1960 -61, the disputed turnover is Rs. 3,11,309 -91. The contention of the assessee in regard to the transactions relating to the disputed turnovers in both the years is, that they relate to purchases made in the course of inter -State trade and as such, not chargeable to tax under S. 5(3)(b) of the Mysore Sales Tax Act, 1957. The contention of the assessee has been rejected by the Appellate Tribunal holding that from the agreements of sale produced, it cannot be held that movement of goods from one State to another has been occasioned under the terms of the contract and consequently, the transactions pertaining to the disputed turnover do not fall within the category of sales or purchases in the course of inter -State trade. The correctness of that finding has bean challenged by the assessee in these revision petitions.
(2.) THE assessee is a Limited Company having its registered office in Bangalore. During the relevant years, the assessee made several purchases of Manganese Ore from dealers inthe State of Mysore. The transactions are evidenced by agreements entered into between the dealers and the assessee. Copies of five agreements relating to the disputed turnover for the year 1959 -60, and 16 agreements relating to the assessment year 1960 -61 were produced before the assessing authority. The particulars of the said agreements have been set out in the order of the Sales Tax Appellate Tribunal. With the exception of three agreements with which we shall deal separately, the rest of the agreements constitute one class, their material terms being the same. It is sufficient it we set out the terms of one of such agreements for the purpose of decision of these cases. The agreement dated 23 -10 -1959 is a typical agreement. It reads thus : - "This agreement made this date between Messrs, The General Produce Co., Ltd., 48, Nehru Nagar; Bingalore - 20, doing Manganese Ore business hereinafter called the sellers and Messrs. Poddar Martin Mining and Minerals (P,) Ltd., 6 Church Street, Bangalore -1, hereinafter called the Buyers, witnesseth as follows : - The seller agrees to sell and the buyers agrees to buy a quantity of about 530 tons (five hundred tons only) Indian Manganese Ore, Mysore origin, practically free from dust and fines and not more than 10% passing through a 20 mash tyler screen of the following settlurgical specifications on terms and conditions hereafter noted. This business has been finalised through Shri S.P. Suda. 1. Specification : - Manganese.. 40/42% rejection below 40% Iron ..... 16% maximum. Silica Alumina - 13% maximum. Phos. 15% -do - 2. Quantity : 500 (Five hundred tons only) Dry long ton of 2240 Ibs. each 10% more or less at the Seller's option. 3. Price : - The price of the goods sanctioned above shall be Rs. 60/ - (Rupees Sixty only) per dry long ton based on 42% Mn. with unitage scale pro rata). F. O. R. at Banasandra Railway Station. These rates are inclusive of sales tax and purchase tax. 4. Delivery : - Upto November 30, 1959 (30 -11 -1959). 5. Sampling and Analysis : - Sampling and Analysis will he done by M/s. Essen and Co., Bangalore, and the moisture sample will be taken by them either at loading station or at Bangalore at the time of transhipment and weighment. The Essayor will draw three samples out of which one will be sent to their Laboratory for analysis and one goes each to the buyers and sellers. The expenses of sampling, analysis and moisture sampling will be borne by both the parties equally, except in case of rejection of the ore due to nonconformity to the guaranteed specification above. 6. Payments : - 90% (Ninety percent.) payment against the stacks duly sampled and analysed by M/S. Essen and Co., Bangalore, and the balance 10% against railway receipt weights. 7. Weighment : - The weighment report of Bangalore City Railway weigh -bridge shall be final and binding on both the parties. 8. Other Terms : - The sellers agree to load the wagons under the supervision of the buyers' representative and that sailers agree that they are responsible for all consequences arising out of underloading of wagons. If the Railway claim any amount towards demurrage for not loading the wagons in time the sellers agree to bear the costs themselves. 9. Force Majeure : - This will be applicable to both the parties. 10. Arbitrations : - Any dispute arising out of this contract shall be decided by arbitration. In witness whereof the parties hereto have put their hands and seals on this the 23rd October 1959." The three agreements above referred to relate to the assessment year 1959 -60, and they read thus : (1) "This agreement made this the seventh day of March, 1959, between Shri P.C. Raju, 80 G, Street, Ulsoor, Bangalore 8, hereinafter called the Seller, and Messrs, Poddar Martin Mining and Minerals (Pvt.) Ltd. 8, Church Street, Bangalore 1, hereinafter called the Buyer, witnesseth as under : 1. Specifications and Quantity. - About 53 tons of Manginese Ore 38/38% F. O. R. Hosadurga sampled by M/s. Essen and Co. 2. Price : - Rupees 40/ - (Rupees Forty only) par dry long ton flat rate. F. O. R. Hosadurga loaded into wagons for Madras Harbour inclusive of all kinds of sales tax. 3. Delivery : - Within a period of four months. 4. Sampling and Analysis and Moisture. - M/S. Essen and Co., the charges of which will be borne equally -between the Buyers and Sellers - Moisture sample will be drawn at the time of sampling. In case it rains, after sampling, another moisture sample may be drawn at the time of loading wagons. 5. Weight : - Weight recorded at Hosadurga or Yeshwantpur weigh -bridge wherever wagons are weighed will be final and for accounting purposes and settlement otherwise, RR weight will be taken as final. Any dead freight demorraige or, excess freight will be on account of the Seller. Quota Slips will be provided for by the Buyers wherein the Seller would register the wagons and obtain wagons for booking the material to Madras. 6. Payment : - 90% against Essen and Co.'s analysis certificate, Geological permit and delivery order signed by Buyers representative and balance 10% if any, on weighment as in clause 5. 7. Arbitration : - Any dispute arising out of this contract shall be decided by arbitration. In witness whereof this contract has been drawn in duplicate and both the Buyers and Sellers have affixed their signature thereto and retained the signed copy in their possession. Signed and delivered : Signed and delivered: For P.C. Raju, For Poddar Martin Mining Sellers. and Minerals (P) Ltd., Sd/ - Byers. Note : - 1% inter -state sales tax leviable on this transaction will be on account of the Seller." (2) "This agreement made this 8th day of August 1959, between Messrs. Poddar Martin Mining and Minerals (P.) Ltd., 6 Church Street, Bangalore -1, (hereinafter called the Buyers) and Mr. C. Bheemasena Rao, 14 Girls School Road, Mavalli, Bangalore -2, (hereinafter called the seller) which term shall include their representatives and heirs witnesseth that : - The Buyers agree to buy and the Seller agrees to sell 400 tons of Manganese Ore of the following specified manganese content : 1 - Quantity : -300 tons of dry long tons of 46/48% manganese ore, and 100 tons of dry long tons of 44/46% manganese ore. 2 - Specifications - The mechanical condition of the ore will he at least 50% half inch and over and not more than 10% below 20 mesh standard -tyler screen. 3. Price : - Rupees 82/50 per dry long tons basis 43% Mn. unitage pro rata, rejection below 46% F. O. R. Amritapura and Rs. 65/ - per dry long ton for 44/46% Mn. unitage pro rata rejection below 44% Mn., basis 49%. This price is inclusive of alt state and central taxes inclusive of sales tax wherever applicable. 4. Payment : -The Seller shall declare the weekly production at mines head accompanied by his analytical report showing the grade and quantity of material tendered. An advance payment of Rs. 45/ per ton based on 22 Cft. will be made by the Bjyers against such declaration. The Seller shall declare that the ore falls in the grades specified above. The buyers will also advance for transport from the mines to the railway station on presentation of his transport bills for quantity transported to railway station. No advance payment will be made for more that 101 tons accumulated at the mine head. Advance far royalties at the time of obtaining permits would also be paid. 5. Weighment : - Actual weighment as ascertained by the Railway at either Arsikere or in case the material is not weighed at Arsikere, the weighment at any other first station between Arsikere and Madras Harbour will be final. 6. Sampling and Analysis : Sampling of the stack will be done at Amritapura siding by M/S. Essen and Co., and their analytic certificate will he drawn at the transhipment at Bangalore, and the moisture content of the first waggon/s (maximum three) will be taken as the moisture of the lot. The analysis and moisture determination charges shall be borne equally by the buyers and sellers. 7. Delivery : - Delivery is to be completed before the 31st January 1960. 8. All ore on which money has been advanced by the buyers shall be the property of the buyers subject to payment of full value alter sampling analysis and railment. 9. The sellers will be responsible for the correct delivery of the material at the rail way station according to the declaration made against each advance payment made by the buyers. 10. Any difference or differences that may arise out of this agreement shall be referred to the arbitration of two arbitrators under the supervision of the Indian Arbitration Act. In witness whereof, the above parties set their hands this eighth day of August 1959." * * * * * * * (3) This agreement made this Fifteenth day of January 1980, between Messrs, Poddar Martin Mining and Minerals (P.) Ltd., of 6 Church Street, Bangalore 1, hereinafter known as the buyers which term shall include their assigns and representatives and C. Bheemasena Rao of 15 Girls School Road, Mavalli, Bangalore, hereinafter known as seller which term shall include assigns and representatives of his, witnesseth that - Whereas the Buyers agree to buy "and Seller agrees to sell 750 tons of Manganese ore as per conditions below it is mutually agreed as follows : (1) The quantity of ore to be delivered is 750 tons within the 30th June 1960, and will be of the following grades, F. O. R. Amritapura, booked for Madras. Over 46% Mn. 350 tons. 44 to 46% Mn. 100 tons. 42 to 44% Mn. 100 tons. 40 to 42% Mn. 200 tons. Total : 750 tons. (2) Specifications : -The mechanical condition of the Ore will be at least 50% half inch and over and not more than 10% below 20 mesh standard Tyler screen. (3) Price : -The following will be prices delivered f. o. r. Amritapura railway station, the sale being on f. o. r. basis, the prices are per dry long ton : 40/42% Mn. Rs. 45/ - (forty -five) basis 42% 42/44% Mn. Rs. 55/ - (Fivty five) basis 44% 44 to 46%Mn. Rs. 65/ - (Sixty -five) basis 46% 46 to 48%Mn. Rs. 90 / - (Ninety) basis 48% 48 / 50%Mn. Rs. 102.50/ - (One hundred and two and naye paise fifty only) basis 50%Mn. For ores 50% and over - Rs. 102/50 (One hundred and two and naye paise fifty only) plus a premium of Rs. 7/50 per Unit pro rata for every unit of Mn. Over 50%.
(3.) DELIVERY : - Ore to be stacked on mats : Ores to be weighed after sampling, weighing to be done at the cost of the seller in the presence of Buyers' agents who should certify the weights; an allowance of 1 -1/2 (one and half per cent) to be allowed oil the ascertained weight to set off against handling losses.;