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2. The background in which this tax revision case has been filed is as follows:

The Petitioner in this case is one M/s Voltas Limited (hereinafter called "the dealer") registered under the Orissa Sales Tax Act, 1947 (hereinafter referred to as "the OST Act") and under the Central Sales Tax Act, 1956 (hereinafter referred to as "the CST Act"). It | is engaged in different activities inside the State of Orissa. During the year 1993-94 the dealer supplied six circulating water pumps to OPGC on the basis of a contract entered into between the dealer and Orissa Tower Generation Corporation (for short, "OPGC"). The dealer also supplied some air-conditioners on the basis of supply of contract to National Thermal Power Corporation (for short, "NTPC") and has also made a separate contract with NTPC for erection, commissioning etc. of air-conditioning system. During the said year, the dealer disclosed its gross turnover under the OST Act at Rs. 7,50,31,028.24 which has been revised by filing annual return on 22.12.1994 for Rs. 7,49,74,817.24 from which a deduction of Rs. 3,96,32,784.17 was claimed on account of turnover under the CST Act and Rs. 3,53,42,033.47 was disclosed as GTO under the OST Act. The deduction of Rs. 3,96,32,784.17 claimed under the OST Act has been shown in the annual return filed under the CST Act claiming exemption under Section 6(2) read with Section 3(b) of the CST Act as "sale in transit". The Sales Tax Officer (hereinafter called as "the assessing officer") while completing assessment under Section 12 (4) of the OST Act had excluded the sales turnover of Rs. 3,96,32,784/- from the total turnover and determined GTO at Rs. 3,53,42,033.07 and raised a demand of Rs. 13,18,351/- against which the Petitioner preferred first appeal.

4. According to the assessing officer, during the year under consideration, the dealer claimed deduction of Rs. 3,64,22,352/- towards sale of circulating water pumps to OPGC and Rs. 52,10,444/- towards sale of air-conditioners to NTPC as tax free on the ground that those were subsequent sales of the goods within the meaning of Section 6(2) of the CST Act. The assessing officer further found that on receipt of purchase order from and after entering into the contract with OPGC the dealer had placed order of purchase for components/ parts of the circulating water pumps with BHEL of New Delhi and Kirloskar Brothers at Pune. These component suppliers raised sale bills in the name of the dealer and also consigned the goods in the name of the dealer, as a result of which, the goods moved from Delhi and Pune to the State of Orissa. The dealer claimed that while the goods were in transit, title of the goods passed to OPGC by means of transfer of documents, which afterwards were again supplied to the dealer by OPGC for use in course of execution of works contract and they being the subsequent seller of the goods in course of inter-state trade, the goods were exempted under Section 6(2) of the CST Act. Analyzing the provisions of law as contained in the CST Act, the assessing officer held that a subsequent sale must be made by way of transfer of documents of title over the goods while the goods were still in transit and before delivery of the same to the purchaser and that any sale made after the goods were delivered to the purchaser shall not be subsequent sale in course of interstate sale within the meaning of Section 6(2) of the CST Act. On verification of different documents produced before him by the dealer, the assessing officer found that the goods were sold to OPGC after they were taken delivery by the dealer, i.e., the goods had completed their journey into the Sate of Orissa before the title in the goods passed to OPGC. He, therefore, rejected the claim of the dealer that they have sold these goods as subsequent dealer within the provisions of Section 6(2) of the CST Act and that the sale is one in course of inter-state trade within the meaning of Section 3(b) of the CST Act. He further held that the contract entered into with OPGC was a supply contract and not a works contract as the goods were sold to the OPGC before they were being used in course of works contract. He treated the sale as an intra-state sale. He levied tax @ 12 % under the OST Act treating the sale as goods qua goods and not related in any way to the works contract.

15. With regard to question no (ii), the Learned Counsel for the Petitioner strenuously argued that the forums below have erred in law in holding that the sales effected by the dealer to OPGC and NTPC are not in course of inter-state sale and do not qualify for exemption under Section 6(2) of the CST Act, but are intrastate sales. In support of his contention he referred to some of the clauses of the agreement entered Into with the OPGC. Referring to clause 7 of the purchase Order Dated 4.1.1992 at page 122 of the paper book; he submitted that the materials are to be delivered to Manager (Materials), IB-Thermal Power Station, at Banharpalli, in the district of Sambalpur, as consignee. He also referred to Clause 11 of the said purchase order that deals with unloading and storing of the materials, which reads as follows:

According to the Learned Counsel, in pursuance to the above, materials were despatched and invoices were raised in favour of the dealer. Consignment notes were duly endorsed by the dealer in favour of the OPGC who thereafter took delivery of goods from the transporter. He further submitted that in support of such transaction, necessary declaration forms 'c' and 'El' were furnished before the Sales Tax Officer in support of the claim for exemption in terms of Section 6(2) of the CST Act and the assessing officer has not found any defect in said declaration forms. In the absence of any defect pointed out in the declaration forms, the claim for exemption in terms of Section 6(2) of the CST Act cannot be disallowed. Similarly, referring to the agreement entered with NTPC, Learned Counsel submitted that the dealer placed orders with HJ International, the manufacturer at Bombay for supply of air-conditioning package and the latter despatched the goods to Talcher and raised bill in favour of the dealer. The dealer on receipt of the lorry receipt endorsed the same in favour of NTPC. He further submitted that as per the clauses of the purchase order, transfer of the title to goods to the consignee would take place while goods were in transit and the same shall be delivered to the Manager (Materials) of the OPGC and NTPC.