Sankar Prasad Mitra, J. - (1.) In this appeal from a judgment of Sinha, J., as he then was, the principal point involved is the meaning of inter-State trade or commerce. The appellant is a manufacturer and supplier of aluminium utensils. It has its registered office in Calcutta. It submitted tenders for the supply of aluminium utensils to the Government of India in its Directorate of Supplies and Disposals required for military purposes. The tenders were made to the Director of Supplies and Disposals, Ministry of Works, Housing and Supply at 6, Esplanade East, Calcutta. The schedule to the acceptance of tender contained, inter alia, the following particulars :- 1. Name and address of the Messrs Jeewanlal (1929) Limit- contractor ... ed, 31, Netaji Subhas Road, Calcutta. 3. Name of indentor ... C. 0. D. Kanpur. 7. Conditions of contract as W.S.B. 133 as amended to date. contained in Form No. ... 8. The indenting department Government/Central/Military/ is ... Commercial. 10. Place of delivery ... Free delivery at A.I.I.G.S., Hastings. (a) Terms of delivery ... Calcutta, (loose) for onward despatch to consignee. 11. Consignee ... To Commandant C.O.D., Kan- pur (siding). 14. Inspection (a) Inspection authority ... A.I.I.G.S., Hastings, Calcutta. 15. Payment (a) By the ... P. & A.O..W.H. & S., Calcutta. (b) During the year ... 1956-57. The general conditions contained in W.S.B. 133 are, inter alia, as follows: II. Delivery. (v)(a) Place of delivery ... The contractor shall as may be required by the Secretary, Department of Supply, deliver the stores either free at, or F.O.R. the place or places detailed in the schedule hereto, and not later than on the dates specified in the acceptance of tender. 16. System of payment. (i) Unless otherwise agreed between the parties payment for the delivery of the stores will be made on submission of bills in the prescribed form. (ii) Payment for the stores or for each delivery will be made to the contractor on submission of bills in accordance with the procedure laid down by the Secretary, Department of Supply (now Ministry of Works, Housing and Supply) as detailed below :- (a) 90 per cent, of the price of each consignment will be paid on proof of despatch of stores to the consignee and on production of an inspection note issued by the Inspector. The balance of 10 per cent, will be paid on receipt of consignment in good condition by the consignee, with his certificate to that effect endorsed on the copy of the inspection note which shall accompany the bill submitted by the contractor. (b) Where the Inspector also acts as the consignee or where inspection is carried out by the consignee himself at destination and in all cases of local delivery full payment shall be made on submission of 'final 100 per cent, bills' supported by the inspection certificate and the consignee's receipt to the Accounts Officer concerned.
(2.) On three several dates, namely 13th September, 1955, 25th September, 1955, and 8th October, 1955, the appellant delivered the goods to A.I.I.G.S., Hastings. The appellant submitted its bills after delivery to the Deputy Accountant-General, Industries and Supplies at P-2, Mission Row Extension, Calcutta, for the value of the goods supplied.
(3.) The appellant is a dealer under the West Bengal Finance (Sales Tax) Act, 1941 (hereinafter called "the West Bengal Act"). In its return submitted before the Commercial Tax Officer, West Bengal, for the assessment year ending 31st December, 1955, the appellant claimed deduction of a total sum of Rs. 21,550.00 being the amount of the bills in respect of the above deliveries under Section 5(2)(a)(v) of the West Bengal Act which provides, inter alia, as follows :- Section 5. (2) In this Act the expression 'taxable turnover' means, in the case of a dealer who is liable to pay tax under Section 4, that part of the gross turnover during any period which remains after deducting therefrom- ... (v) sales of goods which are shown to the satisfaction of the Commissioner...to have taken place in the course of inter-State trade or commerce, within the meaning of Section 3 of the Central Sales Tax Act, 1956...;