LAWS(MAD)-1982-3-6

PARRYS CONFECTIONARY LTD Vs. STATE OF TAMIL NADU

Decided On March 31, 1982
PARRYS CONFECTIONARY LTD. Appellant
V/S
STATE OF TAMIL NADU Respondents

JUDGEMENT

(1.) M/s. Parrys Confectionary Limited, who are dealers under the Tamil Nadu General Sales Tax Act (called the Act) are the petitioners in these tax revision cases. The assessment years with which we are concerned are 1968-69 to 1973-74. The short question that arises for consideration is whether the sales effected by M/s. Parrys Confectionary Limited (called the assessee) in favour of the Canteen Stores Department (India), Bombay, are inter-State sales under section 3(a) of the Central Sales Tax Act and whether the assessee is entitled to exemption under section 8(2A) of the Central Sales Tax.

(2.) The Canteen Stores Department (India), Bombay, placed orders with the assessee for the supply of confectionery goods. Pursuant to the order the assessee despatched goods from the State of Tamil Nadu to Bombay. For the assessment years in question the assessee claimed exemption from levy of tax under the Central Sales Tax Act. While it is the case of the department that the sale of confectionery goods by the assessee to the Canteen Stores Department (India), Bombay, occasioned the movement of the goods and were therefore inter-State sales, it is the case of the assessee that the sales are not inter-State sales, that the sales were effected in Madras and goods were delivered to the Madras Installation of the Canteen Stores Department and the despatch of goods was by the Madras Installation of the Canteen Stores Department. In the circumstances, the sales could not be characterised as inter-State sales. The assessee's contentions were not accepted by the Commercial Tax Officer, the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal. Hence these tax revision cases.

(3.) We shall first take up the question whether the sales of confectionery goods effected by the assessee in favour of the Canteen Stores Department (India), Bombay, were inter-State sales or local sales. To answer this question, it is necessary to state a few facts. A specimen of the order placed by the Canteen Stores Department (India), Bombay, on the assessee is afforded by the order dated 25th November, 1974. By the said order, the Canteen Stores Department (India), Bombay, has called upon the assessee to despatch certain confectionery goods. The said order makes it clear that the goods are to be despatched on behalf of the Canteen Stores Department (India), Madras depot. The consignor and consignee have to be shown as Canteen Stores Department (India), Madras. The order further states that a military credit note No. 475853.55 is enclosed for that purpose. The pro forma invoice is drawn on the Canteen Stores Department (India), CRBID, Fort St. George, Madras. The letter dated 8th April, 1975, which is addressed by the assessee to the Canteen Stores Department (India), CRBID, Fort St. George, Madras, states that the assessee's Nellikuppam factory had despatched 512 cases of confectionery to Manganese Depot, VSD siding, against order No. 10449 dated 25th November, 1974, and that the relevant railway receipt had been posted to Sewri, Bombay. The military credit particulars form has also been enclosed duly filled in. The invoice dated 31st March, 1975, is drawn on the Canteen Stores Department, CRBID, Fort St. George, Madras. A statement of account is furnished to the Madras Office of the Canteen Stores Department on 31st March, 1975. We have been shown the military credit note No. 69680 dated 18th April, 1975. It states "it is most important that clear receipt must be obtained from the railway. Endorsement of 'S.C.' signifying 'said to contain' must be admitted." Military credit note for military stores only, consigned under the military traffic rules, submitted to the station master gives the name and address of the consignor as the Canteen Stores Department, C/o. Parrys Confectionary, Dare House, Madras. The description and marks of packages is given as military stores. The credit note contains a certificate at the footnote to the effect "certified that the above stores are/were bona fide property of the Ministry of Defence at the time of despatch, and that freight is payable by the Ministry of Defence and also that the above stores have not been sold nor are for sale to the public or are being transferred to other (Civil) Departments of Government on sale or loan". The department does not dispute that the pattern of sales of confectionery goods by the assessee to the Canteen Stores Department (India), Bombay, for the assessment years 1968-69 to 1973-74 was of the same pattern. It is also equally admitted that the confectionery goods are brought by road from the Nellikuppam factory of the assessee to the railway siding at Nellikuppam. It is equally admitted that under the military rules the Canteen Stores Department (India) are entitled to a concession in the matter of freight for the transport of goods from one place to another.