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Commissioner,Trade Tax,U.P.Lucknow v. Ratan Lal Gupta Galla Vyapari Rath Hamirpur - SALES/TRADE TAX REVISION No. 963 of 2000  RD-AH 5326 (26 March 2007)
TRADE TAX REVISION NO.963 of 2000.
The Commissioner, Trade Tax, U.P. Lucknow. Applicant
S/S Ratan Lal Gupta, Galla Vyapari, Hamirpur. Opp.Party.
Hon'ble Rajes Kumar, J.
Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 6th April, 2000 relating to the assessment year, 1986-87 under the Central Sales Tax Act.
Dealer/opposite party (hereinafter referred to as 'the dealer') was carrying on the business of foodgrains, oilseeds etc. During the year under consideration, dealer claimed to have sold the goods for Rs.5,79,332/- to the dealers of U.P. and on their instructions, admittedly, dispatched the goods outside the State of U.P. Dealer claimed such sales as intra-State sales and issued Form 3-C-II to the U.P. Parties and also submitted that the U.P. Parties have sold the goods to the Ex-U.P. Parties against form C and admitted inter-State sales in their cases. Assessing authority rejected the claim of intra-State sales in the hand of the dealer and treated inter-State sales. Being aggrieved by the assessment order, dealer filed appeal before the Deputy Commissioner (Appeals), Sales Tax, Kanpur. Deputy Commissioner (Appeals), Sales Tax, Kanpur vide order dated 6th July, 1993 allowed the appeal and held the transactions as intra-State sales. Being aggrieved by the order, Commissioner of Trade Tax filed appeal before the Tribunal. Tribunal by the impugned order, dismissed the appeal.
Heard learned Standing Counsel Despite the service of notice, no one appears on behalf of the dealer.
Learned Standing Counsel submitted that the Tribunal has erred in treating the transactions as intra-State sales while it is admitted that the goods have been dispatched by the dealer outside the State of U.P. He submitted that there is no dispute that there was an element of sale between the dealer and the purchaser and movement of goods was in pursuance of contract of sale. He further submitted that merely because the dealer had issued Form 3-C-II and the U.P. Dealers have shown such sales as inter-State sales against Form C will not be the decisive factor. Nature of the transaction has to be examined in law under section 3 of the Central Sales Tax Act.
I find substance in the argument of the learned Standing Counsel.
Section 3 of the Central Sales Tax Act reads as follows:
"3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce.- A sale or purchase of goods shall be deemed totake place in the course of inter-State trade or commerce if the sale or purchase-
(a) occasion the movement of goods from one State to another; or
(b) is effected by a transfer of documents of title to the goods during their movement from one State to another.
Explanation 1: where goods are delivered to a carrier or other bailee for transmissions, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee.
Explanation 2. Where the movement of goods commences, and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State."
The furnishing of Forms cannot be a basis to determine the nature of the transaction. Nature of transaction is to be determined in law. Admittedly, the goods had been dispatched by the dealer outside the State of U.P. in pursuance of pre-existing contract of sale, therefore, both the conditions, namely, movement of goods outside the State of U.P. occasioned by the sale exists in the present case. Thus, the dispatch of the goods outside the State of U.P. was in the course of inter-State sales in the hand of the dealer. It is not the case of the dealer that the delivery of the goods was given inside the State of U.P.
On the facts and circumstances, Tribunal has erred in treating the transactions as intra-State sales. The transaction, in accordance to Section 3 of the Central Sales Tax Act is inter-State sales liable to Central Sales Tax under the Central Sales Tax Act. The order of the Tribunal is liable to be set aside and the order of the assessing authority is liable to be restored.
In the result, revision is allowed. The order of the Tribunal is set aside and the order of the assessing authority is restored.
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