COMMISSIONER OF SALES TAX Vs. NATHANI BROTHERS
LAWS(MPH)-1967-7-3
HIGH COURT OF MADHYA PRADESH
Decided on July 18,1967

COMMISSIONER OF SALES TAX Appellant
VERSUS
NATHANI BROTHERS Respondents

JUDGEMENT

- (1.) THE Sales Tax Tribunal (Board of Revenue, M. P.) has made this reference under Section 44 of the Madhya Pradesh General Sales Tax Act, 1958, at the instance of the Commissioner of Sales Tax, M. P. The question referred to us is: "whether in the facts and the circumstances of the case the sales amounting to Rs. 34,468. 38 np. were sales made in the course of inter-State trade and commerce or intra-State sales?"
(2.) THE facts of the case are that the assessee firm deals. in manganese ore extracted from a mine in Balaghat District. The assessee was assessed on the sale of manganese worth Rs. 1,04,070/- on the basis that the sales were intra-State sales. The assessee had claimed deductions for the sales worth Rs. 34. 568. 35 np. on the ground that said sales were inter-State sales exempt from the State tax. This claim was negatived by the Sales Tax Authorities; but the Tribunal upheld it.
(3.) THE sales in question were effected in favour of Messrs. Rambahadur Thakur and co. , Nagpur, and Bal Krishna Trading Co; Nagpur, under the contracts dated 17th october 1957 and 8th April 1958 respectively. Under both the contracts the agreement was to sell certain quantity of manganese ore lying at the Katangi railway Station siding at the stated price F. O. R. Katangi. Under both the contracts the assessee was responsible for loading the wagons indented by the purchasers. It is also not disputed by the assessee that the consignees and the consignors of the goods from Katangi were the purchasers in both the cases. Other important conditions relevant to the controversy raised before us are as under: " I. Contract with Messrs. Ram Bahadur Thakur and Co. , Nagpur. DELIVERY: The entire contracted quantity is ready at Katangi Railway station siding and is tendered herewith for sampling. WEIGHT: First net weight at Gondia weighbridge shall be final and binding on sellers and buyers for the purpose of payment. PAYMENT: The buyers agree to pay 80 per cent value of the stacks, tendered and accepted by the buyers on receipt of satisfactory analysis report, and the balance shall be paid by the buyers to the sellers after loading the entire stack and on receipt of first net weight from Gondia weighbridge. * * * ii. Contract with Balkrishna Trading Co. , Nagpur. DELIVERY: Ready stack at Katangi Rly. siding in two lots. PAYMENTS :-- 80 per cent on analysis report and balance on final weight of Gondia weigh-bridge. " These conditions clearly show that the delivery was to be taken by the purchasers at Katangi Railway Station and major portion of the price was to be paid on loading. The balance was, however, to be paid after the exact weight of the ore determined at the weigh-bridge at Gondia a place: outside the State of Madhya pradesh. As the consignors and consignees of the goods in both the cases were the purchasers, there cannot be any doubt that the movement of the goods from katangi to Gondia and onwards was at the instance of the purchasers. The Sales tax Tribunal, however, held that inasmuch as under the terms of the contract the weight of the ore was to be ascertained at the weigh-bridge at Gondia, the movenment of the goods from Katangi to Gondia was occasioned by the terms of the respective contracts and hence the transactions were in the course of inter-State trade and commerce,;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.