1. The disputed turnover in this case is Rs. 1,38,054.38, which was claimed by the assessee as representing the inter-State purchases of raw hides and skins and not the local purchases made by the assessee as held by the Board of Revenue. Initially, this turnover was held by the assessing authority to represent the local purchases of raw hides and skins by the assessee, though from an outside vendor and brought to tax
2. On appeal, however, the appellate authority considered this turnover with reference to relative documents and held that this turnover represented inter-State purchases. The appellate authority mainly proceeded on the basis of the lorry way-bills which showed that the goods were consigned by the out-of-State dealer to the assessee as his buyer. The appellate authority did not go into the question as to whether there were any prior contracts of purchase in pursuance of which the goods were consigned through lorries in all these cases, amounting to the above turnover. The appellate authority took into account the fact that the vendor is an out-of-State dealer and the purchaser is a local dealer and that the goods have moved from the vendor to the purchaser, came to the conclusion and that that fact was sufficient to hold that the transactions were in the nature of inter-State purchases.
3. This order of the appellate authority was revised by the Board of Revenue in exercise of its power of suo motu revision on 13th June, 1966. The Board of Revenue in its order has actually found that there were no prior contracts of purchase before the goods moved in lorries from Kurnool to Madras and that the mere entries in the lorry way-bills will not establish that the goods moved in pursuance of or incidental to any contract of purchase. According to the Board, the movement of the goods in the lorries and the mention of the purchaser's name in the way-bills would only indicate that the consignment was intended to the assessee. But that would not show that there were earlier contracts of purchase. The assessee did not produce any earlier contracts of purchase to show that the goods moved from Kurnool to Madras in pursuance of or incidental to such contracts of purchase. The Board of Revenue also analysed the nature of the transactions and held that, having regard to the fact that the agent of the out-of-State dealer came along with the consignments carried by lorries, that weighments were made in Madras in his presence, that pattials had been prepared long afterwards on the basis of the said weighments, that the transfer of property should have passed only at Madras and that it showed that there was a local sale by the out-of-State dealer to the assessee.
4. It is well-established that in finding out whether a particular transaction is an inter-State transaction or not, the place where the transfer of property passes is immaterial. Therefore, the Board of Revenue may not be right in saying that as the transfer of property passed to the petitioner only in Madras after the goods were weighed in the presence of the vendor's agent, the transaction should be taken to be a local sale. But the basic fact that there were no prior contracts of purchase before the goods moved from Kurnool to Madras cannot be overlooked. Having regard to the provision in Section 3 of the Central Sales Tax Act, the movement of the goods from Kurnool to Madras should have been occasioned by an earlier contract of purchase. Otherwise, the transaction cannot be considered as an inter-State purchase. It cannot be said that mere movement of goods from one State to another without any prior contract of sale or purchase is sufficient to clothe such movement with the character of an inter-State transaction. In this case, the learned counsel for the petitioner places very strong reliance on the lorry way-bills and states that from the entries made therein it is possible to infer that there should have been a prior contract of purchase. As already stated, from the mere fact that the buyer's name is mentioned in the lorry way-bills, it is not possible to assume that there should have been an anterior contract of purchase. At the most, it will show that the goods are intended to the assessee. The learned counsel for the assessee further contends that there were earlier contracts of purchase but they were oral. But we do not find that any argument was put forward before the authorities that there were oral contracts of purchase. We, therefore, feel that the order of the Board cannot be interfered with in this case. The tax case is, therefore, dismissed with costs. Counsel's fee Rs. 150.