Case: Malayalam Plantations Ltd Vs. The Deputy Commissioner Of Agriculturalincome-Tax And Sale

1. The appellant owns several estates wherein inter alia tea is grown and was assessed to sales tax in respect of the tea sold by it during the years 1954-55 and 1955-56, by the Sales Tax Officer, First Circle, Quilon in the State of Travancore-Cochin by his order dated December 23, 1956. In the taxable turnover on which sales tax was computed by the assessing authority has included two items which are the subject of complaint in these two appeals which relate to these two years of assessment. Before the assessing officer the appellant claimed that certain sales of its tea which were conducted by auction at Fort Cochin - a place which at the relevant date was in the Madras State, were sales "outside" the Travancore-Cochin State and that consequently these sales were exempt from taxation by the State of Travancore-Cochin under Art. 286(1)(a) of the Constitution. The Sales Tax Officer rejected this contention and included the sum involved in these sales in the taxable turnover. An appeal filed to the Appellate Assistant Commissioner also failed, this authority holding that as the tea sold was, at the date of the auction, admittedly in godowns in Willingdon Island in the State of Travancore-Cochin, the sales must be deemed to have taken place within the taxing State by virtue of a provision in the State Sales Tax Act to which we shall refer later and hence liable to be included in . the taxable turnover. There was a further appeal taken by the Appellant to the Sales Tax Appellate Tribunal which upheld the appellants contention and set aside the assessment in so far as it included the turnover relating to the auction sales of tea held at Fort Cochi, this turnover amounting to Rs. 56,43184/11/- in regard to the assessment year 1954-55 and Rs. 62,13,604/ 3/- in regard to the assessment year 1955-56 and remanded the case for fresh disposal by excluding these sums from the computation of the taxable turnover. A revision petition was thereafter filed before the High Court by the State under S. 15(b) of the General Sales Tax Act of Travancore-Cochin and the learned Judges allowed the Revision and upheld the order of the assessing officer and the Appellate Commissioner holding the turnover represented by these auction sales to be validly taxable under the State law relating to sales tax. The appellant thereafter applied to the High Court for a certificate of fitness and this having been granted the appeals are now before us.

Reasoning: In the revision application which the department filed to the High Court this question whether the property in the goods did pass at Fort Cochin was raised but nevertheless the argument before the High Court proceeded wholly on the basis of the correctness of the finding by the Appellate Tribunal that the property in the teas did pass on the fall of the hammer at Fort. The point about the property not having passed in the Madras State does not appear to have been even argued before the High Court. Even in the statement of the case filed by the respondent it is not stated that this point about the property not having passed at Fort Cochin in Madras was urged before the High Court during the course of the argument. Before concluding it might be mentioned that in A.V. Thomass case, 1963-14 STC 363   : (AIR 1964 SC 569  ) where, as we have stated earlier, the nature of the transaction was identical with the one in the appeals before us this Courthas been found and it has not been disputed that the title to the goods in the present case passed at Fortthese circumstances, we declined to permit learned Counsel for the respondent to urge any ground relating to the property in the goods in the teas sold not having passed in Fort Cochin in the Madras State to be raised, as the point which is not one of pure law was not urged before the learned Judges of the High Court.