The High Court · 2025

THE II()NOURABLE SRI JUSTICE P.SAM KOSHY AND THE HoNOURABLE SRI JUSTICE NARSING RAO NANIXKONDA 'lAX REVISION CASE No.38 OF 2009 ORDER, A,er Hon'ble Sri Jwtice P.Sam Koshy) Heard llr. S. Vijay Adithya, leamed counsel representirlg Mr. Karthik Ramana Puttamreddy, leamed counsel for the petitioner and Mr. T. Chaitanya, leamed Assistant Govemment Pleader representing Mr. Swaroop Oorilla, learned Special Govemment !'leader for State Tax, appearing for the respondent. Perused the re:ord. 2, The prer;ent is a Tax Revision Case preferred by the assessee under Section 22(l) of the APGST Act assailing the order dated

26.09.2008 paised in Tribunal Appeal No.473 of 2001 by the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad (hereinafter referred as, 'the Tribunal').

3. Vide the impugned order, the Tribunal has rejected the appeal prefent:d by assessee against the revisional authority order dated 08.02.2(t2l i.e.,, the Deputy Commissioner (CT), Warangal Division, Warr,ngal. 2 ,s!xt

4. The point for consideration for the Bench in this tax revision case is that whether the Tribunal was justified in deciding that sale transaction effected by petitioner from Arunachal Pradesh is not a sale falling under Section 3(a) or Section 3(b) ofthe ofCST Act.

5. The facts of the case is that the Singareni Collieries Company Limited, under the unifred state of Andhra Pradesh and now within the State of Telangana, wanted to purchase certain cane baskets. The petitioner assessee facilitated the said purchase from one of the dealers in the State of Arunachal Pradesh. It is relevant to mention at this juncture that in the State of Arunachal Pradesh, dealers purchasing cane products were exempted fiom payment of sales tax as a part of incentive being given to the products made of cane. The petitioner herein placed orders with the dealer in Arunachal Pradesh and as was agreed upon, the dealer in Arunachal Pradesh was required directly to send the cane baskets to the destination i.e., Singareni Collieries Company Limited.

6. The Commercial Tax Officer, at the hrst instance, had decided the matter in favour of the assessee holding that the petitioner would not be entitled to pay CST as there was no direct ,/.} sale between .he parties i.e., the sale which has been effected upon was directly between the dealer in Arunachal Pradesh and the supply made was to the end user inducer i.e., Singareni Collieries Company Lirnited. The product was dispatched directly fiom Arunachal Pradesh and received directly at the Singareni Collieries premlses.

7. Refemng to the provisions under Section 6(2) of the CST Act, the Dcputy Commissioner (CT) Warangal, revised the finding of the Asses:;ing Officer allowing exemption on a turnover ol Rs.9,90,830/-. treating the transaction the second inter-state sale during transit. The order of the Deputy Commissioner, revising the order of the .s.ssessing Officer is dated 08.02.2001. The said order subjected to challenge before the Tribunal by the petitioner assessee and rvhere the Tribunal has not accepted the contention of the petitioner and has rejected the appeal

8. Learned counsel for the petitioner took the Bench to the provisions of Section 3(a) and 3(b) of CST Act and also read it in comparison rvith Section 6(2) of the CST Act and tried to distinguish the provisions and emphatically contended that Section 4 6(2) of the CST Acq as a provision would not be made applicable in the factual matrix of the present case. According to the petitioner, Section 6(2) of the CST Act is a provision which could be attracted only in the event if there is any goods coming from another State or has been effected by transfer of documents or .. to such goods in the course of the movement of goods from one State to another and Section 6(2) of the CST Act would be applicable would be applicable only in the event of any sale being made while the goods are transported from one State to another.

9. According to the petitioner, it is the case where the claim of the petitioner ought to had been appreciated by the revisional authority i.e., the Deputy Commissioner, Warangal, at the hrst instance and by the Tribunal in the course ofpassing the impugned order. According to the petitioner, the authorities failed to appreciate the fact that the petitioner ought to had been given the advantage of taking into consideration the provisions of Section 3(a) read with Section 9(1) of the CST Act, which prescribes collection of tax by the Govemment from whose territories the goods is being transported to other States. Leamed counsel relied 5 upon the decision of the Hon'ble Supreme Court in the case of A & G Plojects and Technologies Limited v. State of Karnatakat and contended that in the light of the aforegiven factual matrix, the impugned order deserves to be set aside and the order of the Assessing Officer should be confirmed holding that the petitioner would be entitled for exemption on the turnover. I0. Per <:.ortra, leamed Assistant Govemment Pleader opposing the petition c:ntended that the order of the Tribunal, so also the order o[ the Deputy Commissioner, Warangal i.e. the revisional authority are by itself very exhaustive in nature. It was further contended by the revenue that both the revisional authority and the Deputy Cornuiissioner, Warangal, have threadbare discussed all the contentions u,hich the petitioner has raised in this tax revision petition while assailing the impugned order.

11. Accordrng to the revenue, the hnding of the authorities cannot be found fault with for the reason that the petitioner was the person who was first purchasing it and Singareni Collieries t 1zoos1 z scc:zo 6 Company Limited was the second purchaser. Therefore, it can be safely concluded that there is a second sale and since there is an admitted second scale that is occurring, the provisions of CST Act forthwith becomes applicable to the petitioner and the said goods may not fall within the purview of Section 3(a) of the CST Act

12. Having heard the contentions put forth on either side and on perusal of the record, more particularly, the pleadings, it would be relevant at this stage to take note of the provisions of Section 3 of the CST Act, at the frrst instance, which for ready reference reproduced hereinunder: "3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce: A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or conrmerce if the sale or purchase-- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation l:- Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and tcrminate at the time when delivery is taken from such carrier or bailee. Explanation 2:- Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact thal in the course of such movement the goods pass though the territory ofany other State". 7 For also applr:crating the contentions of the revenue, it would be necessary to take note of the provisions of Section 6(2) of the CST Act, which is 'eproduced hereinunder: N,rtwithstanding anlthing contained in sub-qectior.r (l) or tt121 sub-secl ion (1 A), whcre a sale ol any goods in thc course of inter- Statc trlle or comlnerce has cither occasioned the movcment of such goocls from one State to another or has been effected by a tlansi-er of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by a transf of documents of title to such goods".

13. Admittcdly, from the materials available with the records, Singareni (loltieries Company Limited intended to purchasc cane baskets. The petitioner submitted their bid for making supply and had approached the dealer in Arunachal Pradesh and made arrangernents lor purchase of their requirement of cane baskets for Singareni Collieries Company Limited. The dealer, in turn, agreed to dispatch the products directly from Arunachal Pradesh State to the Singareni Clollieries. The Singareni Coilieries, had given the order of the petitioner and the petitioner in turn had placed the order to the dealer in Arunachal Pradesh. The invoices were raised in the name of the petitioner. However, the goods were sent directly b), the dealer in Arunachal Pradesh to the Singareni Collieries. 8 :::.r

14. When we read the provisions of Section 3(a) of the CST Act, what is clearly reflected is that a sale or purchase ofgoods shall be deemed to have taken place in the course of inter-state trade if the sale or purchase; (a) occasions the movement of goods from one State to another (b) is affected by a transfer of documents of title to the goods during their movement from one State to another. In the instant case, undoubtedly, the Singareni Collieries had placed an order on the petitioner for supply ofcane baskets. The petitioner, in tum, had purchased the same from the dealer in the State of Arunachal Pradesh. Thus, the aforesaid trade transaction itself clearly reflects that there were two purchases made; (l ) the petitioner from the dealer in Arunachal pradesh; (2) the Singareni Collieries, from the petitioner. Undisputedly, the goods also travelled from Arunachal Pradesh to Singareni Collieries, which again is movement between two States.

15. Even though the goods were directly delivered at the Singareni Collieries, what is evident is that the invoices that were raised were also in the name of the petitioner and the transportation of goods were also in the name of the petitioner and it was the . nre.s€"}?s 9 petitioner rvh,r had made the endorsement on the Iorry receipts during the movement of the goods

16. ln thc aloresaid context, if we look into the order passed by the Deputy' (lommissioner, Warangai, it would reveal that the Deputy Cornrnissioner also was of the view that reading of Section 3(a) of CS'L\ct would go to show that there u,as in fact a sale being made fiom outside the State which, in the instant case was Arunachal Pradesh that had to be delivered in the then unified State of Andhra I'radesh, now the State ofTelangana and then, if we read the provisions of Section 3(a) of CST Act, all that is to be seen is that the sale or purchase of goods being made when the movement of goods takes, place fiorn one State to another.

17. Anothel aspect which is revealed in the coursc of hearing is that in order to get an exemption from payment ol CST under the then provisicns of law, the assessee is required to submit declarations like 'E1' forms duly filled in. No such 'E1' forms have been submitted by the petitioner. This by itselfestablishes the second inter-state sale liable to tax. Further, what is also an admitted factual matrix is that it was the petitioner themselves lvho 10 had shown their sales made to Singareni Collieries Company Limited against 'C' forms received from the Singareni Collieries Company Limited. The fact that the petitioner had shown the sales against 'C' forms received from the Singareni Collieries Company Limited also establishes the fact that the so-called sales were not covered by '81' form enabling them to qualiflz for exemption treating them as sales in the course of business.

18. To makes things worse for the petitioner, there is no document whatsoever produced by the petitioner to show that the purchase of cane baskets was directly from the sales in the State of Arunachal Pradesh. There was no material to show that there was any privity of contract between Singareni Collieries Company Limited with the dealers / sellers in the State of Arunachal pradesh. So far as the judgment relied upon by the petitioner, we find that the same has been decided under an entirely different contextual background vis-it-vis the admitted facts narrated in the present case. Hence, the saidjudgment is distinguishable on facts itself.

19. For all the aforesaid reasons, there cannot be any doubt left in the mind of this Bench to reach to the conclusion that the 11 transactions rLade by the petitioner is one which is liable to be taxed. In vieu' of the same, we art; of the considered opinion that the impugned older does not warrant any interference, and the present 'l-ax ll-evision Case being devoid of merit, deserwes to be and is accoldingly dismissed. There shall be no order as to costs' Conseq,rently, miscellaneous petitions pending, if any, shall stand closerl. SD/. M. RAMANA KRISHNA JO NT REGISTRAR //TRUE COPY' SECTION OFFICER To, The Sales Tax Appellate Tribunal' Andhra Pradesh' Hyderabad The Deputy C ommissioner (CT)' Warangal Division' Warangal' The Commer';ial Tax Officer' Commercial Taxes Department' Kothagudem Two CCs to (]P for State Tax' High Court for the State of Telangana at Hyderabad.IOUT] One CC to S'i Karthik Ramana Puttamreddy' Advocate [OPUC]

1. 2 a 4 6

6. Two CD C-oPies ; il J. -ro*Er*o"e ooYflh, sfl' fip Err 5]afer"y copu9 VH/PSL \q/ HIGH COURT DATED: 1510712025 I B fiil :1;5 ORDER TRC.No.38 of 2009 DISMISSING THE TRC w_- cN2