19 December 1975
Supreme Court


Case number: Appeal Civil 599 of 1975








CITATION:  1976 AIR  410            1976 SCR  (3)  99  1976 SCC  (4) 124  CITATOR INFO :  RF         1980 SC2056  (61)

ACT:      Central Sales  Tax Act,  1956-S. 5(1)  read  with  Art. 286(1)(b) of the     Constitution of India-Contract of sales occasioning export  are eligible to tax under s. 5(1) of the Central  Sales   Tax,  1956-Sales  through  an  intermediary buyer does not "occasion export".      "Stare decisis" doctrine of, is a valuable principle of precedent requiring special or extrodinary reasons to depart from.      Central Sales  Tax Act,  1956 Sec.  3(a), 4(2)(b) and 9 Sale  in   the  course  of  inter-state  trade  or  commerce conditions to be satisfied before a sale can be said to take place. Central  Sales Tax  Act, 1956-Sec.  3(a)-"Movement of goods"-Whether it  makes a distinction between unascertained goods and future good-scope of s. 3(a).      Penalties for  belated return  under the  Central Sales Tax Act  when not     provided for,  the State  cannot  take recourse to  under the  State Sales  Tax Act- Sec. 10 (a) of the Central Sales Tax Act, 1956.      "oriental mixture-term  used in  the contract  of sale, whether "manganese ore" and liable to tax.

HEADNOTE:      The appellant-Manganese  ore (India) Ltd. (a commercial venture  where   the  Government  of  India,  Government  of Maharashtra and  Government of Madhya Pradesh hold shares in the ratio  of 17  per cent  each) entered into four types of "contracts of  sale" with  buyers in India and outside India for selling  the  manganese  ores extracted from the mineral mines leased  out to  it and  situated li  in the  States of Madhya Pradesh and Maharashtra. They were (a) category I are the contracts  where the appellant directly sent the ores to two foreign   companies  on f.o.b.  terms; (b)  category  II represents  contracts   which  were   entered  into  by  the appellant with tho Mineral and Metals Trading Corporation of India Ltd.,  under which  the appellant despatched manganese ore of varying percentage to the M.M.T.C., f.o.b. Bombay and the M.M.T.C.  in turn  exported the goods to foreign buyers; (c) category  III relates  to the  sales to M/s. Ram Bahadur Thakur & Co., Bombay and other buyers who in their turn sold



the goods  to M.M.T.C.  for  export;  and  (d)  category  IV relates to  the sales  in favour  of the  buyers within  the territories of India, but outside the State.      According to s. 3(a) ant 9 of the Central Sales Tax Act, the State of Madhya   Pradesh was competent to levy tax on  the sales  in the  course of  inter-state  trade  or commerce. Under  s. 5(1) of the Central Sales Tax Act, sales occasioning export  or in  the course  of export  are exempt from the purview of the Act.      In respect  of categories  II  to  IV,  the  Sales  Tax Authorities levied  tax under  the Central Act, holding that they were in the course of inter-State trade or commerce and imposed a  penalty of  Rs. 1,000/-  under the Madhya Pradesh General Sales  Tax Act  for belated  filing of  returns. The writ petition  filed by  the assessee  in the Madhya Pradesh High Court failed.      Dismissing the appeal by special leave and quashing the penalty imposed, the Court. ^      HELD: As no export was involved so far as the buyers in India are   concerned,  s. 5(1) of the Central Sales Tax Act has no application at all. This 100 point is no longer "res integra" in view of the Constitution Bench division of this Court in Md. Serajuddin and others v. State of  Orissa, [1975]  2 SCR  47 Where  the sale Y/as not directly and  substantively connected with export, and where between the  seller and  ultimate buyers  intermediaries are involved, such  a sale  would not  occasion any  export  and would not  fall within the purview of s. 5(1) of the Central Sales Tax Act. [102 G, 103 C-D]      Md. Serajuddin  & others  v. State  of Orissa, [1975] 2 SCR, 47, applied.      (2) The  doctrine of "Stare Decisis" is a very valuable principle of  precedent which cannot be departed from unless there are  extraordinary or  special reasons  to do  so, and more so to reconsider a recent constitutional decision. [103 G]      (3) Before  a sale  can be  said to  take place  in the course of  inter-state  trade  or  commerce,  the  following conditions must be satisfied: (1) that there is an agreement to sell  which contains  a stipulation  express  or  implied regarding the  movement of  the  goods  from  one  State  to another. (ii)  that in  pursuance of  the said  contract the goods in  fact moved  from one  State to  another. and (iii) that ultimately  a concluded  sale takes  place in the State where the  goods are  sent which  must be different from the State from  which the  goods move.  If these  conditions are satisfied, then  by virtue  of s.  9 of  the Act,  it is the State from  which the  goods move which will be competent to levy the tax under the  provisions of the Act. [104 D-F]      Balabhgas Hulsachand  and others  v. Stare  of  Orissa, [1976] 2 SCR, 939 relied on.      (4) So  far as  s. 3(a) of the Central Sales Tax Act is concerned, there is no distinction between unascertained and future goods and goods which are already in existence, at he time when  the sale  takes place  these goods have come into actual physical existence. [108 Bl      Balabhgas Hulsachand  and others  v. State  of  Orissa, [1976] 2 S.C.R., 939 applied.      (5) In  the absence  of any provision for penalty under the Central Sales Tax Act itself it is not open to the Sales Tax Authorities  to press into the service the provisions of the State Sales Tax. [108 G]      (6) In  the instant  case, a  careful  perusal  of  the



agreements would  clearly show  that what  the buyers wanted and what  was actually  sold to  them was  manganese are and after all  the goods  were stocked  together,  the  required percentage under  the contracts  of sale  automatically come into existence.  The word  "oriental mixture"  is  merely  a technical terminology or just another name for what is known in the  commercial world  as manganese ore. therefore, It is clear that  it was     manganese ore and manganese ore alone which was  sought to  be sold  by the  appellant to  various buyers  in  India.  The  mere  fact  that  certain  specific contracts have  been mentioned  does not alter the character and quality  of the  goods that are actually supplied by the appellant   to   its   various      purchasers.   In   these circumstances, therefore,  the theory of the ore supplied by the appellant  being only one constituent and not the entire goods sold is illusory. [105 D-F, 107 B-D]      Central Provinces  Manganese ore Co., Ltd. v. The State of Maharashtra,  S.T. Ref. 17-20/1964 decided on 7-4-1969 by Bombay High  Court,    Commissioner  of Sales  Tax,  Eastern Division Nagpur  v.    Hussenali  Adamji and    company  and another, 10 S.T.C. 297, (Distinguished).

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: :Civil Appeal No. 599 of 1975. (Appeal  by special  leave from the judgment and order dated the  23-4,1974 of  the Madhya  Pradesh High  Court  at Jabalpur in MiSC. Petition No. 542 of 1971.      S. V.  Natu, D. K. Kambarkar and V. N. Ganpule, for the appellant.      Ram Panjwani  and H. S. Parihar, for the respondent. 101      The Judgment of the Court was delivered by      FAZAL ALI,  J.- This  is an  appeal  by  special  leave against the  judgment and  order of  the Madhya Pradesh High Court dated  April 23,  1974 dismissing  the  writ  petition filed by  the appellant  before the  High Court for quashing the order  of the  Assessing Authorities  imposing tax under the Central  Sales Tax Act, 1956 on the basis of a number of sales  made   by  the  appellant  Company  in  pursuance  of multifarious contracts  of sale.  The appellant  Company was formed in  pursuance of  an agreement  dated  June  8,  1962 between the  President of  India and  the Central  Provinces Manganese ore  Company Limited.  Before this  agreement  the said Company  which will  be hereafter  referred to  as  the ’C.P.M.O.C.’ was  a  private  company  incorporated  in  the United Kingdom  and carried  on the  business of  extracting manganese ore  from several mines in the erstwhile States of C.P. & Berar and Bombay. By virtue of the agreement referred to above a new Company was formed under which the Government of India,  the Government  of Maharashtra and the Government of Madhya  Pradesh held  shares in  the ratio  of  17%  each whereas the  original Company  C.P.M.o.C. retained shares to the extent of 49%. Thus the position was that in the present commercial venture  the Central Government had preponderance of share.  The appellant,  after the  formation of  the  new Company, was  known as Manganese ore (India) Ltd. which will hereafter be  referred to  as the M.O.I.L.. Fresh leases. to extract the  minerals from  the various mines were issued by the Government  in favour  of the  M.O.I.L.. and the Company entered into  contracts with buyers in India and outside for selling the  manganese ore  extracted from the various mines situated in the States of Madhya Pradesh and Maharashtra.      A close  analysis of  the contracts entered into by the



appellant Company  and the  business carried  on by it would manifestly reveal  that the  contracts may  be divided  into four separate and clear categories.      Category-I are the contracts by which the manganese ore extracted by  the appellant  company is  sent directly  to a foreign company  known r  as M/s. Philips Brothers on f.o.b. terms.  Another  such  contract  was  entered  into  by  the appellant with  B.I.S.C.(Ore)   Ltd.,  London  for  sale  of oriental manganese ore f.o.b. Visakhapatnam. Copies of these contracts were  filed before the High Court as Annexures Q & R. The  Regional Assistant  Sales Tax  Commissioner accepted the contention  ,. .  Of the  appellant that  so far  as the sales under  these contracts were concerned, they occasioned export and  were clearly  exempt from  the Central Sales Tax Act as  they fell  within the purview of s. 5(1) of the said Act. We  might also  mention  here  that  the  main  dispute between the  parties is  regarding the  applicability of ss. 3(a), 4(2)  (b) and    9  of  the  Central  Sales  Tax  Act, according  to  which  the  State  of    Madhya  Pradesh  was competent to  levy tax on the sales made by the appellant in the course  of which  the manganese ore moved from the State of Madhya  Pradesh  to  other  States  in  India.  The  main contention of  the appellant  before the  High Court as also before the  Sales Tax  Authorities was  that all these sales were outside sales and not in the course of 102 inter-State trade  or commerce  and therefore the provisions of the  Central Sales  Tax Aat  did not apply. The Assistant Sales Tax  Commissioner  negatived  the  contention  of  the appellant and  hence a  writ petition  was filed  before the High Court. We might also mention that the writ petition was filed by  the appellant  company before  the High Court even before taking  recourse to  the normal  procedure laid  down under the  Madhya Pradesh  General Sales Tax Act, 1958. This was obviously done because the appellant chose to assail the levy of tax on the ground that the Sales Tax Authorities did not possess  any jurisdiction  to impose the tax inasmuch as the sales  were not  at all covered by the Central Sales Tax Act. We  have stressed this fact particularly because before the High  Court the appellant raised some questions relating to the merits of the matter which could be properly agitated before an  Appellate or  Revisional  authorities  under  the Madhya Pradesh  General Sales  Tax Act.  Thus so  far as the sales in  Category-I are  t. concerned,  the Assistant Sales Tax Commissioner  accepted the plea of the appellant and did not levy any tax on those sales. These sales, therefore, did not form the subject matter of the present appeal before us. This position was conceded by both sides.      Category-II represents  contracts  which  were  entered into by  the appellant  company with the Minerals and Metals Trading Corporation  of India  Ltd.- hereinafter referred to as MMTC  under which  the appellant despatched manganese ore of varying  percentage to  the  MMTC  f.o.b.  Bombay.  After having received  the  goods  from  the  appellant  the  MMTC exported the  goods to  foreign buyers.  The copies  of  the contracts comprising  these sales  are Annexures N, O and P, before the High Court.      Category-III relates  to sales as per agreements copies of which  are Annexures  S, T  and U  by which the appellant sold to  M/s Ram  Bahadur Thakur & Company, Bombay and other buyers which in turn sold the goods to the MMTC.      As  regards  these  two  categories,  Category  II  and Category III,  the appellant  advanced two-fold  contentions before us.  In the  first place  it was  argued that  as the goods were  eventually exported  by the buyers from India to



foreign  countries,   therefore,  the   sales  made  by  the appellant  were   not  inter-State  sales  but  sales  which occasioned exports  and, therefore,  fell within  s. 5(1) of the  Central   Sales  Tax   Act.  The   High   Court   after consideration of various aspects of the matter overruled the contention of  the appellant  and held that as no export was involved so   far  as the sales made by the appellant to the buyers in  India were  concerned, therefore,  s. 5(1) had no application at  all. This matter need not detain us further, because it  is no  longer res  integra and is now completely concluded by  a Constitution Bench decision of this Court in Md. Serajuddin  and others  v. State of Orissa(1) where Ray, C.J., speaking for the majority observed as follows:           "To establish  export a  person  exporting  and  a      person importing  are necessary elements and the course      of export is      (1) [1975] 2 S.C.R. 47 103       between  them. Introduction  of a  third party dealing      independently with  the seller on the one hand and with      the importer  on the  other breaks the link between the      two  for   then  there   are  two   sales  one  to  the      intermediary and  the other  to the importer. The first      sale is not in the course of export  because the export      commences with  the intermediary.  The tests  are  that      there must  be a  single sale  which itself  causes the      export or  is in  the progress  or process  of  export.      There is no room for two or more sales in the course of      export.      x      x     x     x        x           The expression "occasions" in Section S of the Act      means the  immediate and  direct  cause.  But  for  the      contract between the corporation and the foreign buyer,      there was no occasion for export. Therefore, the export      was occasioned   by  the contract  of sale  between the      Corporation and  the  foreign  buyer  and  not  by  the      contract  of  sale  between  the  Corporation  and  the      appellant." The Court  clearly held that where the sale was not directly and substantially  connected with  export, and where between the seller and ultimate buyers intermediaries were involved, such a sale would not occasion any export and would not fall within the  purview of s. 5(1) of the Central Sales Tax Act. It is not disputed that all the sales covered by Category II and Category  III were actually made by the appellant not to any foreign  exporter but  to buyers inside India whether it was MMTC  or whether they were other private firms. In these circumstances, therefore,  the sales  mentioned above  could not be  said to  be sales  which occasioned  any export. The High Court,  therefor, rightly  found that  these sales were completed within  the territory  of  India  when  the  goods passed to  the buyers.  The High  Court further    found  as follows:           "For these  reasons, it  cannot be held that these      sales occasioned  the export within Section 5(1) of the      Central Sales  Tax Act  and were sales in the course of      export." The High  court relied  on a  number of  authorities, but in view of   the  decision of  this Court  in Md.  Serajuddin’s (supra) case  it is  not necessary  for us to consider those authorities  at   all,  because  the  matter  has  now  been concluded by a decision of this Court. In fact this position was conceded  by Mr. Natu appearing for the appellant but he tried to persuade us to refer the case to a larger Bench for reconsidering  Md.   Serajuddin’s  (supra)   case.  We  are,



however, unable to agree with the prayer made by the learned counsel for  the appellant  because this Court has given its decision recently  and the  doctrine of  stare decisis  is a very  valuable   principle  of  precedent  which  cannot  be departed from  unless there  are extra  ordinary or  special reasons to  do so. We are unable to find any special reasons for   reconsidering    Md.   Serajuddin’s    case   (supra), particularly when this Court has laid down the rule, namely, that where the sale is in fact and in law a pure inter State sale, it  cannot be treated to be a sale occasioning export. This, therefore,  disposes of the first plank of attack made by the appellant 8-390SCI/76 104 on the  judgment of the Madhya Pradesh High Court so far the sales contained in Categories II and III are concerned.      Category-IV is  in respect of contracts of sale, copies of which  are Annexures 1 to 7 before the, High Court. These sales were admittedly made by the appellant in favour of the buyers within  the territory of India but outside the State. It was,  however, contended  that as  the goods purported to have been  sold to  the buyers did not in fact move from the State of Madhya Pradesh, therefore, there was no inter-State sale, but  only an  inside sale in the State where the goods were delivered,  and therefore  the State  of Madhya Pradesh had no  jurisdiction to levy tax under the Central Sales Tax Act. The  same arguments  were applied  to Categories II and III on  the ground that if the sales comprised in Categories II and  III were not sales in the course of export they also were not  inter-State sales,  because the  goods which moved from the State of Madhya Pradesh were not actually the goods which were  sought to  be sold to the buyers in other States in India. The High Court has considered this matter at great length and  has relied  on a  number of  authorities.  In  a recent judgment  of this  Court in  Balabhgas Hulaschand and ors.  v.  State  of  orissa(1),  after  review  of  all  the authorities on the point, this Court held as follows:           "That the  following conditions  must be satisfied      before a  sale can  be said to take place in the course      of inter-State trade or commerce:           (1)  that there  is an  agreement  to  sell  which                contains a  stipulation  express  or  implied                regarding the  movement of the goods from one                State to another;           (ii) that in  pursuance of  the said  contract the                goods in    fact  moved  from  one  State  to                another; and           (iii)that ultimately  a concluded sale takes place                in the  State where  the goods are sent which                must be  different from  the State from which                the goods move.           If these  conditions are  satisfied then By virtue      of s.  9 of  the Central  Sales Tax Act it is the State      from which  the goods  move which  will be competent to      levy the  tax under the provisions of the Central Sales      Tax Act." On a careful consideration of the facts and circumstances of the present  case we  are satisfied that the present case is directly covered  by the decision of this Court in Balabhgas Hulaschand’s case(1).      The  learned   counsel  for  the  appellant  sought  to distinguish Balabhgas  Hulaschand’s case(1)  on  the  ground that what  was despatched  from Madhya  Pradesh  was  merely managanese ore  of a  particular percentage but that was not the property  which was sought to be purchased by the buyers



in other States. It was contended that under the      (1) [1976] 2 S.C.R. 939. 105 contracts or  sale the  property which  was to  be sold  was continental A  mixture which  consisted of  various kinds of rocks or  manganese ore  which  were  mixed  together.  What therefore was  actually despatched, according to counsel for the appellant,  was merely  one of  the constituents  of the goods purported to be sold and not the goods which were ores purchased by the buyers. The High Court in its well reasoned judgment has  fully considered this aspect of the matter and has rightly  pointed out  that there  is  no  mechanical  or scientific process by which the continental mixture is made. According to  the appellant  itself the  mixture comes  into existence  automatically   by  piling   up   manganese   ore despatched from various States one after the other. In other words, the  position is  that suppose 1000 tons of manganese ore is  sent from  Madhya Pradesh  and another thousand tons from various  mines from  Maharashtra, when  these ores  are stocked at one place by being piled up one upon another they automatically  produce   continental  mixture  with  various constituents properties and percentages required.      Mr. B.  Sen appearing for the respondent submitted that what was   I  actually sold  was manganese ore of an average percentage and  it was not right to say that actually one of the constituents  of the manganese ore was despatched by the appellant from various mines situated in the State of Madhya Pradesh. In  fact, manganese  ore like  iron or  coal  is  a special type of commodity which is not capable of undergoing any scientific  process of  mixing up  resulting in  an  end product. We  find ourselves  in complete  agreement with the argument of the learned counsel for the respondent. It seems to us  that the  word ’oriental  mixture’ which has no doubt been  used  in  some  of  the  agreements  produced  by  the appellant is  a misnomer, because this is merely a technical terminology or  just another  name for  what is known in the commercial world  as manganese ore of an average or standard percentage of about 49%. A careful perusal of the agreements would clearly  show that what the buyers wanted and what was actually sold  to them  was manganese  ore and after all the goods were  stocked together  the required  percentage under the contracts of sale automatically came into existence. For instance, the  relevant provisions  of one of the contracts, which has been quoted by the High Court, runs thus           "QUALITY: The  average quality  of the  ore to  be      supplied  by  sellers  should  be,  without  guarantee,      49.25% Manganese, 0.15% Phosphorus, 9%  Silica and 7.5%      Iron  PROVIDED   ALWAYS  that   as  such  supplies  are      furnished by mixtures of ores from the sellers’ several      mines the  aver age  quality of  the samples taken from      deliveries from.  each mine  shall from  the  basis  of      settlement." It would  be seen  that what  was to  be supplied  was  only manganese ore  of the  percentage of 49.25%. Properties like Phosphorus, Silica  and Iron  are inherent  constituents  of manganese ore  and are bound to. be found in every manganese ore. Similarly in another contract 106 which appears  at p.  117 of  the Paper  Book and  which was entered into  by the  appellant with  the MMTC  the relevant passage runs thus:           "The execution of this Sale Agreement is dependent      on the  sellers being  able to  rail the  ores from the      mines to the port for shipment and also of the grant of      any necessary export permit.



    1. QUALITY:  30,000 (Thirty  thousand tonnes(1) of 1000      kgs. each, 5% more or less at Buyers’ option.      2. SPECIFICATIONS:      Mn.            basis     48 %      rejection      below     46%      Fe.                      10% maximum      Silica+Alumina           14% maximum      Phos.                    0.18 % maximum" Here also  it would  appear that  the agreement  is only for sale of  manganese ore.  Although a  certain  percentage  is mentioned but  that percentage is derived automatically when the manganese  ores are  stocked together.  In most  of  the other contracts  which have  been filed-  by the appellants, for instance,  in another  contract which  has been  entered into between the appellant and the MMTC on February 22, 1968 what is sold is ’oriental grade manganese ore’. Similarly in another contract  between the  appellant and  Ms Ram Bahadur Thakur &  Company dated  February 28, 1968 the property sold is  about  25,000  Metric  Tonnes  of  oriental  Mixture  of Manganese ore.  In another  contract which appears at p. 147 of the Paper Book and which is between the appellant and the Universal Ferro  & Allied  Chemicals Ltd., Tumsar Road, what is sold  is 12,000 metric tonnes of Manganese ore. There was another stipulation  as  to  delivery  in  respect  of  this contract as follows:           "The sellers  will load  the component  ores  from      their mines  into the wagons which will be arranged for      by the  buyers who shall be the consignors, in the name      of the  sellers, who  shall be  the consignors, at such      mines’ sidings  and  for  such  quantities  as  may  be      declared from  time to  time by  the sellers’  Managing      Director, the  destination of  all the  ,, wagons being      Tumsar in  the State  of Maharashtra  and  the  railway      freight being payable by the buyers at the destination.      As aforesaid,  after the  loading of the component ores      into wagons  the buyers  shall be  responsible  in  all      respects in  respect of  the goods  so loaded  into the      wagons." The stipulation  in this  contract that  after  loading  the component  ores   into  the   wagons  the  buyers  shall  be responsible in respect of the goods 107 is a  clear pointer to the fact that the manganese ores that were loaded   into  the wagons  were undoubtedly  the  goods which were  purported to be sold under the contract of sale, otherwise the buyers would not have taken the responsibility for the ores loaded into the wagons if it was really not the ores which  the  appellant  were  to  supply  but  merely  a constituent thereof.      A close  perusal  of  the  various  contracts  of  sale entered into  by the  appellant  would,  therefore,  clearly disclose that  it was  manganese ore and manganese ore alone which was  sought to  be sold  by the  appellant to  various buyers in  India. The  mere fact that certain specifications have been  given or  certain percentages have been mentioned does not  change the  character or  the quality of the goods that are  actually supplied  by the appellant to its various purchasers.      Another important  feature of  the contract  of sale is that a  certain amount  of tonnage of manganese ore is to be supplied by  the appellant  which is stretched over a period of few  months which  shows that the appellant was to supply the ore  in instalments.  In these circumstances, therefore, the theory  of the  ore supplied by the appellant being only one constituent  and not the entire goods sold appears to be



purely illusory  and is  not at  all supported  even by  the contracts of sale filed by the appellant. For instance, if a firm placed  an order for 1000 bales of cloth to be supplied to it  by the  seller in  the course  of five  months and in pursuance of  this contract if the seller supplies 200 bales every month  it cannot  be said that the first instalment of 200 bales  is not  the goods  sold but only a constituent of the same. On a parity of reasoning, therefore, the manganese ores loaded  by the  appellant in  the railway wagons in the State  of  Madhya  Pradesh,  are  clearly  included  in  the contract of  sale which  itself provides that the supply has to be made within. a specified period of few months.      Learned counsel for the appellant placed great reliance on a  judgment of the Bombay High Court, a certified copy of which has  been filed in this Court in the Central Provinces Manganese ore  Company Ltd.  v. The State of Maharashtra(1). In the first place this judgment is not at all applicable to the facts of the present case, because the Bombay High Court was not dealing with a sale under the Central Sales Tax Act. The  High   Court  was   pre-eminently  concerned  with  the provisions of  the C.P.  and Berar  Sales Tax  Act, 1947 and there is  nothing to  show that  the provisions  of that Act were in  pari materia to the provisions of the Central Sales Tax Act.  More than  this, we  do not  want to say about the judgment of the Bombay High Court.      Reliance was also placed by the appellant on a decision of  this   Court  in  Commissioner  of  Sales  Tax,  Eastern Division, Nagpur v. Husenali Adamji and Company & Another(2) which also  does not appear to be applicable to the facts of the present case, because the Supreme Court in that case was dealing with  the question as to when the title in the goods passes.      (1) Sales  Tax Reference Nos. 17, 18, 19 and 20 of 1964 decided on April 7, 1969.      (2) 10 S.T.C. 297. 108      Lastly it  was contended  by counsel  for the appellant that as  the manganese ores despatched by the appellant were unascertained  or   future  goods   which  would  come  into existence only after the manganese ores extracted in various mines in  Madhya Pradesh  and Maharashtra  were stocked  and piled up  one after  the other  the provisions of s. 3(a) of the Central  Sales Tax  Act would not apply. This contention is completely  without substance  in view of the decision of this Court  in Balabhgas Hulaschand’s case, (supra) where it was pointed  out that so far as s. 3(a) of the Central Sales Tax  Act  is  concerned  there  is  no  distinction  between unascertained and  future goods  and goods which are already in existence, if at the time when the sale takes place these goods have  come into  actual  physical  existence.  In  the instant case  also it  was never  disputed before  the  High Court or  before us  that the  manganese ore was loaded into the wagons after being extracted from the mines and that the sales of these manganese ores despatched from Madhya Pradesh to various  States actually  took place  and the  goods were ultimately accepted  by the buyers in other States. In these circumstances, therefore,  it is  quite clear  in this  case that the  movement of  the goods  took place in pursuance of the contracts  of sale  which ultimately  merged into actual sales and it was only there after that the tax was sought to be levied  by the  State of  Madhya Pradesh. It was also not disputed that  the tax has been levied only on such sales of the manganese  ore  despatched  from  the  State  of  Madhya Pradesh which  came from  the mines situated in the State of Madhya Pradesh.  Thus all  the incidents  of an  inter-State



sale are  pre sent in the instant case and the view taken by the High Court that the sales were covered by s. 3(a) of the Central Sales  Tax Act  is absolutely  correct and  we fully endorse the same.      These were  the main  arguments advanced  before us  by counsel for  the appellant.  Apart from  these,  some  small points were also argued by the learned for the appellant. In the  first  place  it  was  submitted  that  the  Sales  Tax Authorities had  no jurisdiction  to impose a penalty of Rs. 1,000/- for the delay in filing the return under the Central Sales Tax Act, because there was no provision in the Central Act making a dealer liable to pay penalty for filing belated returns and recourse could not be taken to the provisions of the State  Act on the subject. The High Court negatived this plea following  two Division  Bench judgments  of the Madhya Pradesh High Court. The view taken by the High Court on this point is  legally erroneous  be cause  this  Court  in  M/s. Khemka & Co. (Agencies) Pvt. Ltd. v. State of Maharashtra(1) has pointed  out that  in the  absence of  any provision for penalty under  the Central  Sales Tax  Act itself  it is not open to  the Sales Tax Authorities to press into service the provisions of  the State  Sales Tax Act. In this connection, this Court observed as follows .           "It is  only tax  as well  as penalty payable by a      dealer   under the  Central Act  which can be assessed,      re-assessed,  collected   and  enforced  in  regard  to      payment. The words      (1) [1975] 3 S.C.R. 753. 109       as  if the  tax or  penalty payable  by such  a dealer      under the  A Central  Act is  a tax  or penalty payable      under the  general sales  tax law  of the  State"  have      "origin and root in the words" payment of tax including      any penalty payable by dealer under the Central Act".      x x x x x x      For the  foregoing reasons  we are  of opinion that the provisions in the State Act imposing penalty for non-payment of income-tax  within the  prescribed time is not attract ed to impose  penalty on  dealers  under  the  Central  Act  in respect of  tax and penalty payable under the Central Act. x x x  x x  The Central  Act contains  specific provisions for penalty. Those are the only provisions for penalty available against the  dealers under the Central Act. Each State Sales Tax Act  contains provisions for penalties. These provisions in some  cases are  also for  failure to  submit  return  or failure  to   register.  It   is  rightly  said  that  those provisions cannot  apply to  dealers under  the Central  Act because the Central Act makes similar provisions. In this  view of  the matter,  therefore, this  part of  the order of  the High  Court must  be set aside and the penalty imposed by  the Assist  ant Sales  Tax Commissioner  must be quashed.      It was then submitted that a purchase tax on a turnover of Rs.  748/- has  been levied  under s.  7(1) of the Madhya Pradesh General  Sales Tax Act. It was, however, pointed out by the  respondent that  the tax  was actually lev ed on the purchases made  by the  appellant from  unregistered dealers and is  a very  petty amount.  In view  of this  concession, learned counsel for the appellant did not press this matter. The finding  of the  High Court on this point is, therefore, affirmed. F      Lastly it  was submitted  that the  Assistant Sales Tax Commissioner was  wrong in  holding  that  the  turnover  in respect of inter-State sales was not supported by ’C’ Forms. This is  also a  matter which  relates to  the merits of the



case which  could be  properly agitated before the Appellate or Revisional authorities under the State Sales Tax Act.      The result is that the penalty of Rs. 1000/- imposed by the Assist- ant Sales Tax Commissioner is quashed. All other contentions raised by the appellant fail and the judgment of the High  Court on  those points  is  hereby  affirmed.  The appeal  is   accordingly  dismissed  with  the  modification indicated above, but- in the circumstances without any order as to costs. S.R.                                     Appeal dismissed. H 110