Case Law Details

Case Name : State of Tamil Nadu Vs Annamalaiar Mills Ltd. (Madras High Court)
Appeal Number : (2015) 63 234
Date of Judgement/Order :
Related Assessment Year :

CA Bimal Jain

CA Bimal JainTransaction would be Inter-state sales where movement of goods is from one State to another in terms of purchase order, even if goods are supplied to common godown of buyer and seller


Annamalaiar Mills Ltd. (the Respondent), carrying on business in States of Tamil Nadu, placed an order for supply of specific number of cotton bales to the Maharashtra State Co-operative Cotton Growers Marketing Federation Ltd., Bombay (the Federation) situated at Maharashtra. The Respondent and the Federation was maintaining a common godown. The Federation confirmed order of the Respondent and moved the goods from Maharashtra to a godown in Tamil Nadu, which was under common control. Further, in the lorry way bill, the Respondent was shown as buyer of goods and the Federation as seller.

The Respondent claimed that transaction with the Federation was inter-state sale, however the Assessing Authority as well as the First Appellate Authority claimed that such transaction was a local sale.


The Hon’ble High Court of Madras held that when the specified quantity and quality of cotton bales are moved from State of Maharashtra to the State of Tamil Nadu with reference to the firm purchase order placed by the Respondent to the Federation, with lorry way bill showing the Respondent as buyer of goods and the Federation as seller, it clearly shows that there is an inter-state movement of cotton, which has been wrongly alleged as local purchase by the Assessing Officer.

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October 2020