IYANAHALLI BAKKAPPA & SONS. versus STATE OF MYSORE

Citation: [1972] 2 S.C.R. 213 · Decided: 29-10-1971 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Dismissed

Judgment (excerpt)

A 
IYANAHALLI BAKKAPPA & SONS. 
• 
v. 
STATE OF MYSORE 
October 29, 1971 
2\3 
[C. A. VAIDIALINGAM, 
P. JAGANMOHAN REDDY AND 
B 
K. K. MATHEW, JJ.] 
c 
() 
E 
F 
G 
H 
Mysore Sales Tax Act. 1951--Sale of safety matche.r taxable under s. 
5(3)(a) on first or earliest of successive dealers in State of My~ore-On­
facts of case 1vhether assessee was first of successive dealers in State of 
Mysore. 
The appellant declared for the assessment years 1959-60 a total turn-· 
over of Rs. 13,04,097 in respect of the purchase df safety matclhes and 
claimed exemption on the entire turnover on the ground that it was a 
subsequent sale from the dealers in the State of Mysore. During the re-
levant assessment year sale of matches was taxable under s. 5(l)(a) of 
the Mysore Sales Tax Act, 1957 on the first or earliest of the successive 
dealers in the State of Mysore. The modus operandi of the appellant in 
purchasing these matches was that it placed orders with the sales depots 
of the manufacturers inside Mysore. 
The Managers of the depots for-
warded the orders to the principles who has their head office at Sivakasi 
outside the State of Mysore. The matches were thereafter despatched by 
the principal to the appellant in accordance with the instructions received 
from the Sales Depots. 
The Sales Depots sent the appellant detailed in· 
voices of the matches despatched by their factories. The appellant gave 
credit to the value of the matches after deducting therefrom the amount 
covered by debit notes in respect of Octroi, lorry freight and other inci
4 
dental charges incurred by it and at the request of the sales office the 
appellant remitted the value of the matches direct 
to the factory by 
means of draft and telegraphic transfer. The appellant's contention was 
that it purchased the matches from the sales depots inside Mysore State 
who were the first sellers of the matches in the State of Mysore liable to 
tax and the appellant being the second dealer in the State was not liable 
to tax in respect of its sales. The assessing authority came· to the conclu-
sion that the transactions were inter-State sales within the meaning of s. 
3 (a) of the Central Sales Tax Act and since the appellant was the first 
dealer in matches in Mysore State it was liable to pay sales tax. 
The 
appellant's appeals to the Deputy C-Ommissioner of Commercial Taxes 
and to the Tribunal were unsuccessful. 
The High Court rejected 
the 
revision petition filed by the appellant. 
In appeal to this Court, 
HELD : From the facts the sales were made by the respective facto· 
ries direct to the appellant. The sales price was also sent directly to the 
factories at Sivakasi. No doubt the orders were routed through the sales 
depot but on that account it could not be said that the factory sold the 
goods ordered by the appellant to its sales depot. It was inconceivable 
that there could be a sale between the manufacturer and its Sales Depot. 
[215 E-Gl 
The transactions in question under explanation 3(a) to s. 2(1) of the 
Mysore Act were the first sales in favour of the appellant and they took 
place m the State ot Mysore. The decision in the case of Ram Narain & 
Sons, if applied to the facts of the present case, would indicate that the 
first sale by the Sivakasi firms was in Mysore. In that view, the question 
of inter State sale not 'Oeing urged as necessary .for consideration, it was. 
rightly held by the High Court that ·the sales in question fell within cl. 
(lloj of Explanation 3 of s. 2(t) of the Act. As such the appeal must be: 
diamissed. 
[216 E, 217 D-EJ 
214 
SUPREME COURT l/.EPORTS 
[1972] 2 S.C.R. 
'Ram Narain & Sons v. Asstt. Commissioner of Sales u;x & Ors., ll955] 
A 
2 S.C.R. 483, discussed. 
CIVIL APPELLATE' iuRISDICTION : Civil Appeal No. 1175 of 
1967. 
Appeal from the judgment and order ·dated September 30, 
1966 of the Mysore High Court in S.T.R.P. No. 58 of 1965. 
B 
R. Gopalakrishnan, for the appellant. 
A. R. Somanatha Iyer, M. S. Narasimhan and R. B. Datar, for 
the respondent. 
The Judgment of the Court was delivered by 
P. Jaganmoban Reddy, 
J. This 
Appeal is 
by 
certi-
ficate against the judgment of the Mysore High Court dismissing 
the Revision Petition against the order of the Mysore Sales Tax 
Appellate Tribunal, by and under which the assessment order of 
c 
the Commercial Tax Officer and the 
Appellate 
order of the 
Deputy Commissioner of Commercial Tax was confirmed. 
The 
question of law which arose out of the dec

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