Case: M/S. I.D.L. Chemical Ltd Vs. State Of Orissa

the seller, would not change the nature of the sale. It was further observed that if movement of goods delivered to the buyer was occasioned by the contract of sale, the mere fact that the actual sales pursuant to the contract were effected subsequently is immaterial. Their Lordships observed as follows: "If there is a conceivable link between a contract of sale and the movement of goods from one State to the other in order to discharge the obligation under the contract of sale, the inter-position of an agent of the seller who may temporarily intercept the movement ought not to alter the inter-State character of the sale." 9. In Sahney Steel and Press Works Limited & Anr. v. Commercial Tax Officer & Ors. [(1985) 4 SCC 173] it was observed that movement of the goods from Hyderabad to the branch office was only for the purpose of enabling the sale by the branch office and was not in the course of fulfillment of the contract of sale. But this was negatived by this Court. This Court observed that it appears that the movement from the very beginning from Hyderabad all the way until delivery is received by the buyer is an inter-State movement. Relying on an earlier decision in English Electric Company of India Ltd. v. Deputy Commercial Tax Officer [(1976) 4 SCC 460, their Lordships held that it amounts to inter-State sale. Their Lordships observed as follows: "What is decisive is whether the sale is one which occasions the movement of goods from one State to another. It was also pointed out that the branches had no independent and separate entity, that they were merely different agencies, and even where a branch office sold the goods to the buyer it was a sale between the Company and the buyer. It is true that in that case the goods, on manufacture at the Madras branch factory, were directly dispatched to the Bombay buyer at his risk and all prices were shown F.O.R. Madras, and the goods were delivered to the Bombay buyer at Bhandup through clearing agents. In the instant case, the goods were dispatched by the branch office situated outside the State of Andhra Pradesh to the buyer and not by the registered office at Hyderabad. In our opinion, that makes no difference at all. The manufacture of the goods at the Hyderabad factory and their movement thereafter from Hyderabad to the branch office outside the State was an incident of the contract entered into with the buyer, for it was intended that the same goods should be delivered by the branch office to the buyer. There was no break in the movement of the goods. The branch office merely acted as a conduit through which the goods passed on their way to the buyer. It would have been a different matter if the particular goods had been dispatched by the registered office at Hyderabad to the branch office outside the State for sale in the open market and without reference to any order placed by the buyer. In such a case if the goods are purchased from the branch office, it is not a sale under which the goods commenced their movement from Hyderabad. It is a sale where the goods moved merely from the branch office to the buyer. The movement of the goods from the registered office at Hyderabad to the branch office outside the State cannot be regarded as an incident of the sale made to the buyer." This case clinches the issue and we need not multiply other cases as the facts of this case are nearer home. 10. Mr.Ganesh, learned senior counsel for the appellant has also referred to various decisions which have peculiar facts but the case of Sahney Steel & Press Works Ltd. (supra) is nearer home and therefore it will not be necessary to multiply each case and unnecessarily overburden the judgment. Suffice it to say that one case which supports the view, which we have taken and which has been relied on by the High Court also. Another case, which is on the same line is Indian Oil Corporation Ltd. & Anr. V. Union of India & Ors. [1980 (Supp) SCC 426] . Similar is the case in Union of India & Anr. V. M/s. K.G. Khosla & Co. Ltd. & Ors. [(1979) 2 SCC 242] . Mr.Ganesh, learned senior counsel for the appellant has also submitted that the Court should also look at as to how the parties have understood the agreement and in support thereof placed reliance on a decision of this Court in The Godhra Electricity Co. Ltd. & Anr. V. The State of Gujarat & Anr. [(1975) 1 SCC 199] and also submitted that the finding of fact recorded by the Tribunal should not have been interfered with by the High Court and also invited our attention to a decision of this Court in Ashok Leyland Ltd. v. State of T.N. & Anr. [(2004) 3 SCC 1] in support of his contention that the goods were not subjected to inter-State sale. It is not necessary to go into all these facts as we have already held above on factual aspect that the goods which were triggered from Rourkela and sold to the subsidiaries of the CIL through the appellants consignment agents were essentially meant to be sold to the subsidiaries of the CIL and the goods primarily triggered from Rourkela and were sent to the subsidiaries of the CIL amounted to inter-State sale and the view taken by the Division Bench of the Orissa High Court is correct. 11. Before we part with this case we may observe that the authorities will go into the factual aspects and find out how much of the quantity of the goods were sent to other undertakings other than the subsidiaries of CIL and assess tax on the supplies which were made to the subsidiaries of CIL as inter-State sale.12. As a result of our above discussion, we

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is not necessary to go into all these facts as we have already held above on factual aspect that the goods which were triggered from Rourkela and sold to the subsidiaries of the CIL through the appellants consignment agents were essentially meant to be sold to the subsidiaries of the CIL and the goods primarily triggered from Rourkela and were sent to the subsidiaries of the CIL amounted to inter-State sale and the view taken by the Division Bench of the Orissa High Court iswe part with this case we may observe that the authorities will go into the factual aspects and find out how much of the quantity of the goods were sent to other undertakings other than the subsidiaries of CIL and assess tax on the supplies which were made to the subsidiaries of CIL as inter-State sale.