LexSTATE OF MYSORE versus GUDUTHUR THIMMAPPA & SON, & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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STATE OF MYSORE
v.
GUDUTHUR TlllMMAPPA & SON, & ANR.
September 30, 1966
[J. C. SHAH, V. RAMASWAMI AND V. BHARGAYA, JJ.]
Madras General Sales-tax
(Turnover & Assessment)
Rules,
1939:0
r. 4-A (iv) { b )-Sale to· non-resident-Delivery to common carrier withi"n
State and insurance by buyer-Property if
passes
within
State-Lost
dealer, who L~·-Location of dealer if mtllerial.
Rule 4A(iv) (b)
of the Madras General Sales-tax
(Turnover
and
Assessment) Rules, 1939 lays down that tax has to be levied from
the
dealer who buys cotton in the State
and is the last dealer not exempt
from taxation. Sales-tax was sought to be recovered
fro~ the respon-
dents on cotton purchased by them within the State and sold to persons
who were non-resident within the area to which the Madras Sales-tax Act,
1939 applied.
The non-resident buyers never entered the State either for
entering into contracts for the sale or for taking delivery.
The delivery
was given within the State to the common carrier, and the non-resident
buyers insured the goods as owners thereof and transmitted them to desti-
nation. The respondents' I?lea that since· the goods were sold by them
within the State to non-residents, they were not the last dealers not
exempt from taxation, was accepted by the Sales-tax
Appellate Tribunal
and the High Court.
In appeal to this Court the appellant-State con-
tended that ( i) on the facts the respondents were the last dealers not
exempt from taxation and (ii) a buyer who was not resident within the
area to which the Act applied could not be held to be the last dealer for
the purpooc of the Rule.
HELD : (i)-The contention had no force. The common carrier took
delivery as agent of the buyer and the delivery
was within
the State.
1bcre W<i<-. lhe further circumstance that,
during transit, the goods were
insured hy the buyers at their own cost, and not by the respondents. The
buyers thus recognised that they were already the owners of the goods as
soon as they were given for transmission to the common carrier. [630 E]
The movement of the goods outside the State was by the buyers them-
selves after property in them had passed to them; so, the sales in question
were not sales in the course of inter-State trade. [631 CJ
Tata Iron and Steel Co. Ltd., Bombay v. S. R. Sarkar & Ors. [1961]
1 S.C.R. '79, referred to. ·
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(ii) Under the Rule the location of the dealer buying it WB! immate-
rial. Therefore the non-resident buyers were the IB!t dealers who boupt
it in the State and tax bad to be levied from them. {631 0-H]
Stale of Andhra Pradesh v. Ml s. Abdul Bakhl & Bro.r. AI.R. 196S
S.C. 531, r~ferred to.
Civn. APPELLATE JURISDICTION : Civil Appeals Nos. 714-724
of 1965.
Appeals by special leave from the judgment anc;l order dated
January 29, 1962 of the Mysore High Court in Civil Revision
628
SUPREME COURT REPORTS
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{1967] 1 S.C.R.
Petitions Nos. 1169 to 1176 of 1958 and 841, 842 and 865 of 1959
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respectively.
R. Ganapathy' Iyer and R. N. Sachthey, for the appellant (in
all. _the appeals).
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· R. Gopalakrislzan, for the respondents (in an the appeals).
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The Judgment of the Court was delivered by
· Bhargava, J. · These appeals arise out of proceedings for
assessment of sales-tax under the Madras General Sales Tax Act
. No. IX of 1939 (hereinafter referred to as "the Act") in respect of
certain sales of cotton. The respondents were registered dealers
in cotton, including kappas, groundnuts and cotton seeds with
their Head Office at Bellary and Branch O;Iices at a number of pla-
ces. They were also licensees under s. 8 of. the Act in respect of
cotton. They made various purchases of cotton at their places
of business and subsequently sold them to different parties. Amongst
these were a number of persons who were not resident within the
area to which the Act applied. The question arose as to who was
liable to pay· the sales-tax in respect of those transactions of sale
of cotton in which the cotton had been sold by the respondents to
non-residents. When the case came up before the Mysore Sales
.Tax Appellate Tribunal, the Tribunal determined the c.ourse of
.transactions and held as follows :
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"The examination of the contracts, the invoices, the
railway receipts, insurance policies and other documents
relating to the. disputed turnovers shows that the non-
resident foreigners place orders for the required nuExcerpt shown. Read the full judgment & AI analysis in Lexace.