TATA IRON AND STEEL CO., LIMITED, BOMBAY versus S. R. SARKAR AND OTHERS.

Citation: [1961] 1 S.C.R. 379 · Decided: 29-08-1960 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

• 
1 S.C.R. SUPREME COURT REPORTS 
379 
TATA IRON AND STEEL CO., LIMITED, 
BOMBAY 
v. 
S. R. SARKAR AND OTHERS. 
(B. P. SINHA, c. J., JAFER IMAM, A. K. SARKAR, 
K. c. DAS GUPTA AND J. c. SHAH, JJ.) 
Sales Tax-Inter-State sales-Sale effected by transfer of 
documents of title to goods during their movement from one State to 
another-Appropriate State to tax such sale-Place where sale 
effected-Central Sales Tax Act, I956 (74 of I956), ss. 2(a), 3, 4-
Constitution of India, Art. 286. 
The petitioner, a limited company carrying on the business 
of manufacturing and selling fron and steel goods, with its 
factory at Jamshedpur in Bihar and its head Sales Office in 
Calcutta in west Bengal, was served with a notice on August 12, 
1959, by the Commercial Tax Officer of West Bengal directing it 
to submit a statement of sales from Jamshedpur for the period 
of assessment July l, 1957, to March 31, 1958, "the documents 
relating to which were transferred in West Bengal or of any other 
sales that may have taken place in West Bengal under s. 3(b) of 
the Central Sales Tax Act, 1956." 
For the same period, i.e., 
July 1, 1957 to March 31, 1958, of assessment the petitioner had 
on December 15, 1958, filed with the Sales Tax Officer, Jamshed-
pur, a return of inter-State sales made from Jamshedpur, in 
which were included all sales in which movement of the goods 
had taken place from the State of Bihar to destinations outside 
the State, and had paid advance tax nnder the Central Sales Tax 
Act, 1956. The petitioner contended before the Taxing Officer 
of West Bengal, inter alia, that in so far as its inter-State sales 
from Jamshedpur were concerned the situs of snch sales, as 
determined nnder s. 4(2) of the Act, would always be in the State 
of Bihar as the goods were in Bihar and that the State of West 
Bengal could not tax a sale where goods were under the contract 
of sale moved from Bihar to Bengal even though the documents 
of title to the goods sold were transferred in Bengal, such sales 
being taxable only by the State of Bihar. The Taxing Officer, 
however, taxed all the sales effected by the company under 
s. 3(b) on the view that the sales in which the documents of title 
were handed over in Calcutta were taxable in the State of West 
Bengal because (1) all the sales effected in favour of West Bengal 
parties satisfied the conditions prescribed by s. 3(b), and (2) the 
place where the documents were delivered by the company to 
the purchaser was the place where the sale was effected. 
Held, (per Sinha, C. J.,- Imam and Shah, JJ., Sarkar and 
Das Gupta, JJ., dissenting): (1) that within cl. (b) of s. 3 of the 
49 
August ag. 
1960 
'fttftt Iron ls. 
Strei Cn., l.td. 
v. 
' 
380 
SUPRK\IE COURT REPORTS 
[1961] 
Central Sales Tax Act, 1956, are included sales in which property 
in the goods pa.ssPs during the rnovernent of the goods from one 
State to another by transfer of documents of title thereto clause 
(a) of s. 3 covers sales, other than those included in cl. (h). in 
which the movement of goods from one State to another is the 
result of a covenant or inci<hnt of the contract of sale, and pro-
perty in !:le goods passes in either State. 
(2) that sub-s. (2) of s. 4 of the Act defines what sales or 
purchases shall be deemed to take place inside a State and, 
thereby, locates the place wl1ere a sale is effected. The terms of 
the sub-scctiori-heing quite general provide also for cases where 
sales are effected in the course of inter-State trade or commerce 
under s. 3 of the Act. 
· 
Cll that the Taxing authorities in West Bengal had to ascer-
tain, before they could order payment of tax under the Central 
Sales Tax Act, whether on t1e materials they were satisfied (a) 
that the goods at the time of transfer of documents of title were 
in movement from the State of Bihar to the State of West 
Bengal, and (b) that the pJa.:e where the sale was effected was, 
under s,4, cl. (2). withi1i the State of West Ilengal. 
Per Sarkar and Das Gupta. Jj.--A sale contemplated by 
s. 3(b) ul the Central Sales Tax Act, 1956, is one where the trans-
fer of property in the goods sold takes place hy the transfer of 
documents of title to them during their movement from one 
State to another and is effected within the State in which the 
documents of title are transferred, that State is the "appropriate 
State" in respect of such sale 
(2) The purpose of s. 4(2) of the 
Act is to formulate principles .'or determining when a sale. 

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