VBC Fertilizers and Chemicals Limited vs State of A.P.

Bilal Nazki, J.—This is a revision against the order of the Tribunal holding that the goods were moved by way of sale and therefore the asses-see could not claim exemption on the ground that the goods were moved from Andhra Pradesh to Bihar otherwise than by way of sale and they were transferred from one branch to another branch. The following questions of law have been framed:

(1) Whether the Sales Tax Appellate Tribunal is justified in holding the transactions as inter-State sales when the transactions are supported by declarations in form F and evidence of dispatch of the goods from Visakhapatnam to different destinations in Bihar ?

(2) Whether the Sales Tax Appellate Tribunal is correct in concluding that a dealer should be registered on the date when the goods are dispatched from Visakhapatnam and not on the date when goods are taken delivery by the branch in Bihar ?

(3) Whether the sale of goods in the delivery State after the physical landing of the goods in the course of inter-State movement should be considered as an internal sale or and inter-State sale ?

(4) In any view, the order of the Sales Tax Appellate Tribunal is illegal and improper.

These are questions of fact, therefore in terms of Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 the revision itself is not maintainable. The power of revision is limited and the High Court can intervene in terms of Section 22 of the Act if it comes to the conclusion that the Appellate Tribunal has either decided erroneously, or failed to decide, any question of law. As no question of law has been raised, we are of the view that the revision is misplaced.

Even otherwise we have not been able to find any perversity in the orders of the authorities below, including the Tribunal. According to the assessee, the goods were imported, they were not exigible to tax and after import these goods were transferred to their branch office at Patna. But the authorities below, on facts, found otherwise. The evidence which was relied upon by the Tribunal included a letter written by M/s. Paradeep Phosphates Ltd., to the assessee. This letter reads mentioning the subject, "purchase order for 25,000 metric tonnes of imported DAP from Vizag to Port to be supplied to various destinations" and the letter reads as under:

With reference to your offer letter dated November 17, 1992 and subsequent discussions with your vice president, we are pleased to accept your offer under the following terms and conditions:

Quantity to be purchased 25,000 metric tonnes.

Packing - Packing is to be made 50 kg net for which HDPE bags will be supplied by PPL.

Price - Rs. 7,070 plus taxes, for destinations.

Payment terms - Payment, at the above rate, shall be made on 40th day from the date of RR. However, the railway freight involved shall be reimbursed on production of copies of the RR along with copies of railway money receipt on 3rd day from the date of dispatch, which will be adjusted against the final payment towards cost of the material.

Transit shortage/weighment shortage found at the destinations/supply points shall be borne by M/s. VBC Fertilisers & Chemicals Ltd. Payment shall be released on the basis of net quantity received.

Supplies to the State of U. P., for which separate DIs are being given along with this letter are to be completed by November 30, 1992. For supplies to other States, i.e., Tamil Nadu, Karnataka, M. P. and Bihar, firm DIs shall be placed by November 24, 1992. For those States also a definite supply schedule shall be indicated.

As requested by your Vice-President, Marketing, we are issuing a separate letter to your bankers confirming that payment will be released by Paradeep Phosphates Ltd., on the due date.

The Tribunal also found that there was an agreement between M/s. Paradeep Phosphates Ltd., and the assessee. Clause 5 of the agreement provides that shortage in transit shall be borne by the VBC Fertilisers & Chemicals Ltd. The agreement also provides for the quantity to be supplied. It mentions the price per metric tonne. It also provides for way of packing, which specified that the empty boxes would be supplied by VBC. It also provides time schedule and mandates that the supply shall be completed by November 30, 1992. The dates of supply of different quantities and different RRs by VBC Fertilizers & Chemicals Ltd., were also mentioned by the Tribunal in its order in para 19. The Tribunal recorded a finding of fact that it was seen from the table that the goods covered by the disputed turnover were moved from Andhra Pradesh to Bihar after November 18, 1982 by M/s. Paradeep Phosphates Ltd., when the contract was finalised. The ultimate buyer in all the cases was Paradeep Phosphates Ltd. None of the consignments was sent to Patna where the branch of the assessee situated. While according to the assessee, the goods were sent to their branch at Patna and the branch endorsed the RRS to Paradeep Phosphates Ltd., without taking physical delivery which amount to a local sale by the branch to Paradeep Phosphates Ltd., the contention of the State was that there was no branch at all by the date of either agreement or by the date the goods arrived at the destination points in Bihar. In view of these findings of fact, the revision is misplaced.

The assessee/petitioner relied on two judgments, one from Andhra Pradesh High Court in Hyderabad Engineering Industries Limited Vs. The State of Andhra Pradesh, . This was admittedly a case where the transfer had been made to branch office. Similarly, the case in Indian Duplicators Ltd. Vs. State of Tamil Nadu, is also with respect to sale by a branch office. On facts, the authorities below including the Tribunal found that there was no branch office in Patna when the goods were moved and the goods were moved to Patna in pursuant of agreement. Therefore the revision is misplaced and is accordingly dismissed. No costs.