SINGARENI COLLIERIES CO. LTD. versus STATE OF ANDHRA PRADESH AND OTHERS

Citation: [1966] 2 S.C.R. 190 · Decided: 12-10-1965 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

SINGARENI COLLIERIES CO. LTD. 
v. 
STATE OF ANDHRA PRADESH AND OTHERS 
October 12, 1965 
[P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, 
M. HIDAYATULLAH, J. C. SHAH AND S. M. SIKRI, JJ.] 
Hyderabad General Sales Tax Act, 1950, s. 2(k)--Supply of coal to 
consumers outside State pursuant to allotment orders under Colliery Control 
Order, 1945-Whether allotment order covenant or incident of contract 
of sale-Whether sales tax under State Act leviab/e-Or whether exempt 
under Explanation to Art. 286(J)(a) or as inter-State sales. 
lbe appellant company carried on the business of mining coal from its 
collieries and supplying it to consumers both wilhin and outside the State. 
In proceedings for assessment to Sales tax, the company claimed that 
it was not liable to pay sales tax under the Hyderabad General Sales 
Tax Act, 1950, on the price of coal supplied to al!ottees outside the 
taxing State pursuant to the directions of the Coal Commissioner issued 
under the Colliery Control Order, 1945. 
This claim was rejected by 
the Sales Tax Officer on the ground that the coal in question was sold 
F.O.R. colliery siding and was actually delivered to the consumers within 
the State when it was loaded on their account in Railway Wagons at 
the colliery siding. 
The appeals against that decision to the appellate · 
authorities as well as to the High Court were dismissed. 
On appeal to this Court, 
HELD : The sales in question were not liable to be taxed under the 
Hyderabad General Sales Tax Act, 1950. [203 DJ 
Sales of coal between April, 1, 1954 and September 6, 1955, for 
delivery to consumers outside the State could not be taxed under the 
Hyderabad Act because they were covered by the explanation to Art. 
286(l)(a) before it was amended. [201 F] 
Under the Colliery Control Order, supply, use and disposal of coal 
were regulated from the. stage of production till 
consumption. 
Coal 
supplied was meant for consumption by the allottee; therefore when the 
allottee was outside the State, it was supplied for the purpose of con-
sumption in the State in which the allottee resided or carried on business. 
The expression "actually delivered" used in Explanation to Art. 286(1) (a) 
does _not include mere symbolical or notional delivery e.g. by entrusting 
goods to a common carrier, or by delivery of documents of title like 
railway receipts. [194 H, 196 B, 200 F] 
Shree Bajrang Jute Mills v. The State of Andhra Pradesh, 15 S.T.C. 
430, followed. 
Similar Sales during the period September 7, 1955 to September 10, 
1956 were also exempt because the Explanation continued to remain in 
force. till the latter date and furthermore during that period the State 
had no power to levy tax on inter-State sales. [201 G-H] 
lJengal Immunity Co. Ltd. v. State of Bihar, [1955] 2 S.C.R 603, 
referred to. 
~
B 
..
c 
D 
E 
.. 
F 
G 
• 
H 
' 
A 
B 
c 
D 
SINGARENI COLLIERIES v. STATE (Shah, J.) 
191 
For the period September 11, 1956 to January 4, 1957 although 
Art. 286(2) stood repealed, there was no power in the State to tax 
inter-state sales; and from January 5, 1957 to March 31, 
1957 the 
power to tax inter-state sales rested exclusively with the Central Gov-
ernment under the Central Sales Tax Act, 1956. Coal was transported 
from the colliery of the company to consumers outside the taxing State 
as a result of a convenant or incident of the contract of sale and there-
fore the sale must be regarded as an inter-State sale within the meaning 
of s. 3(a) of the Central Act and not liable to be taxed under the 
I;Iyderabad Act. [202 D, 203 B] 
Tata Iron & Steel Co.. Ltd. v. S. R. Sarkar, [1961] I S.C.R. 379, State 
Trading Corporation of India Ltd. v. State of Mysore, 14 S.T.C. 188 and 
Cement Marketing Co. of India v. State of Mysore, 14 S.T.C. 1751, refer-
red to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 950-952 
of 1963. 
Appeals from the judgment dated the November 15, 1960 
of the Andhra Pradesh High Court in T.R.C. No. 17 of 1960 
and dated the July 25, 1961 in Special Appeals Nos. 1 & 2 of 
1961. 
N. A. Palkhivala, S. N. Andley, Rameshwar Nath, P. L. Vohra 
and Mohinder Narain, for the appellant. 
D. Munikanniah and T. V. R. Tatachari, for the respondents. 
M. Adhikari, Advocate-General, Madhya Pradesh and I. N. 
E Shroff, for intervener no. 1. 
M. C. Seta/vad, N. A. Palkhivala, A. P. Sen, R. K. P. 
Shankardass, 
J. B. Dadachanji, 0. C. Mathur and Ravinder 
Narain, for intervener no. 2. 
· 
N. A. Palkhivala, A. P. Sen, R. K. P. Sh
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