SHREE BAJRANG JUTE MILLS LTD. versus STATE OF ANDHRA PRADESH

Citation: [1964] 6 S.C.R. 691 · Decided: 06-02-1964 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

6 S.C.R. 
SUPREME COURT REPORTS 
691 
SHREE BAJRANG JUTE MILLS LTD. 
v. 
STATE OF ANDHRA PRADESH 
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, K. c. DAS 
GUPTA, J.C. SHAH AND N. RAJAGOPALA AYYANGAR JJ.) 
Sales Tax-Goods delivered to places outside State for consumption itt 
those States-Liability .to 
tax-"Explanation 
Salei'-Exprtssion 
''Actually delivered", 
meaning of-Constitu1ion of India, 
Art. 
286(1)(a)-·lndian Sale of Goods Act, 1930, r. 39. 
The appellant, carrying on business as a manufacturer of jute goods 
with its factory at Guntur, u~ed to send jute bags by railway to the 
cement factories of the A.C.C. outside the State of Andhra. Fer securing 
a regular supply of jute bags, the A.C.C. entered into a contract with 
the appellant and under the despatch instructions. from that company, 
the appellant loaded the goods in th!; railway wagons, obtained railway 
receipts in the name of the A.C.C. as consignee and against payment 
of the price, delivered the receipts to the Krishna Cement Works, 
Tadepalli, which was for the purpose of receiving the railway receipt 
and making payment, the agent of the A.C.C. From the amounts shown 
as 
gros~ turnover in the return for the assessment year 1954-55, the 
appellant claimed reductidn of certain amounts in respect of the goods 
supplied by rail to the A.C.C. outside the State of Andhra Pradesh 
under its despatch instructions. The Commercial Tax Officer and the 
Deputy Commissioner of Commercial Taxes disallowed the claim and 
held that as the railway receipts were delivered to the agent of the 
buyer within the State of Andhra, and price was also realized from 
the agent of the buyer within the State, goods must be deemed to have 
been delivered to the buyer in the State of Andhra Pradesh, and the 
appellant was liable to pay tax on the sales. On appeal, this order· 
was reversed by the Appellate Tribunal. In revision the High Court 
restored the order of the Deputy Commissioner of Commercial Taxes. 
The question for determination in this appeal was whether the sales to 
the A.C.C. by the appellant may be regarded as "non·Explanation sales", 
i.e. falling outside the Explanation to Art. 286(1). 
Held: (i) If the gocxls were delivered pursuant to the contracts of 
sale outside the State of Andhra for the purpose of consumption in 
the State into which the gocxls were delivered, the State of Andhra 
couid have no right to tax those sales by virtue of the restriction imposed 
by Art. 286(l)(a) read with Explanation. 
To attract the Explanation, the goods had to be actually delivered 
a' a direct result of the sale, for the purpose of consumption in the 
State in which they were delivered. The expression "actually delivered" 
in the context in which it occurs, can only mean physical delivery of 
.964 
Febru1ry 6. 
SUPREME COURT REPORTS 
1964 
the goods, or such action as puts the goods in the poMOSSion of tho 
lllrH 
Ba/rang purchaser; it does not contemplate mere symbolical or notional delivery. 
lut• MilLr 
C. Govindarajulu Naidu cl Co. v. State of Madras, A.l.R. 1953 
"'* .J• Andhro Mad. 116, Mis. Capco Ltd. v. Sales Tax Officer, A.l.R. 1960 All. 62 
Prada/I 
and Khaitan Minerals v. Sales Tax Appellate Tribunal for Mysor<, A.I.II. • 
. 1963 Mysore 141, followed. 
..,, 1. 
Poppat Lal Shah v. State of Madras, [1953] S.C.R. 617, Tata Iron A: 
Steel Co. Ltd. v. State of Bihar, [1958] S.C.R. 1355, Tobacco Man .. 
facturtrs (India) Ltd. v. Commissioner of Sales Tax, Bihar, [1961) 
2 S.C.R. 106, Indian Copper Corporation Ltd. v. State of Bihar, [1961} 
2 S.C.R. 276 and State of Kera/a v. Cochin Coal Co. Ltd., [1961] 2 
S.C.R. 219. referred to. 
(ii) Section 39 of the Indian Sale o! Goods Act will not make mere 
delivery · of -the railway receipts representing title to the goods, 
act'~11 
delivery of goods for the purpose of Art. 286. The rule · contained ;,. 
s. 39(1) h~ no ·applicat.ion in dealing with a constitutional provi.sio• 
which while' imposiJ:\8 a restriction upon the legislative power of the 
States entrusts exclusive power to levy sales tax to the State in which 
the goocjs, have been ~ly delivered for the purpose of consumption. 
CIV~L APPELLATE JURISDICTION: Civil Appeal No. 542 
of 1962. 
Appeal from the judgment and order dated April 7, 
1960, of the Andhra Pradesh High Court in Tax Revision 
case No. 27 of 1958. 
M. C. Seta/vad, K. Srinivasamurthy and Naunit Lal, for 
the ap;iellant. 
A. Ranganadham Chetty and B. R. G. K. Achar, for the 
respondent. 
Fe

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