Goods transported to out-of-state depots otherwise than as a result of direct sale which would attract tax under Section 6 of the Central Sales Tax Act- SC

The SC last week dismissed the appeal of Hyderabad Engineering Industries against the judgment of the Andhra Pradesh high court ruling that the transactions between several cities constituted inter-state sales, as contemplated under Section 3(a) of the Central Sales Tax Act. The company was part of Jay Engineering Works with head office in Delhi. It has other related companies with different names in different states.

The company claimed exemption on a turnover of Rs 8,87,75,643 towards goods transported to out-of-state depots otherwise than as a result of direct sale which would attract tax under Section 6 of the Central Act. It argued, the transactions on which exemptions claimed cannot be regarded as sales in the course of inter-state trade, chargeable to tax under the Central Act. This contention of the assessee was rejected by the high court and the SC.

M/S. Hyderabad Engineering Vs State Of A.P. on 4 March, 2011

Supreme Court of India

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