Balasubrahmanyan, J.
1. Three textile mills in this State arranged for import of Egyptian cotton from the UAR (United Arab Republic) on the basis of their actual user's import licences. The petitioner purchased the cotton from them. The question in this revision is whether, for purposes of the Tamil Nadu General Sales Tax Act, 1959, the said purchases can be held to have taken place not in this State, but in the UAR.
2. The petitioner claimed before the taxing authority that the goods arranged to be imported from the UAR were still lying in the UAR ports when the petitioner entered into its contracts of purchase with the three importing mills in the State. It was accordingly urged that the purchases took place only in the UAR.
3. This claim was negatived by all the authorities. The Tribunal, in particular, rejected the claim as not proven. The petitioner has relied on certain letters written by the importing mills, which were stated to recite the terms of the agreements of sale between them and the petitioner. The Tribunal, however, recorded a finding that these letters cannot be accepted as genuine, but must be held to have been fabricated later. The letters were supposed to have been written within a matter of days of the importing mills getting into their hands the import licences. According to the Tribunal, it was improbable that the petitioner could have entered into a bargain with the importing mills so soon after their having obtained the licences and even before the shipments had left the UAR ports. The Tribunal noticed internal evidence in the correspondence itself to enable them to infer that it must have been a subsequent concoction. The assessing authority had pointed out in its order of assessment that the documents relating to the imports between the Egyptian cotton merchants in the UAR and the three importing mills in this State had not seen the light of day in the assessment proceedings. The Tribunal found that even the letters and the invoices made out by the importing mills in the petitioner's favour in respect of these purchases were not found entered in the mills' stationery meant for those purposes but in loose sheets of paper. On these and other considerations, the Tribunal rejected the petitioner's claim that the petitioner had entered into contracts of purchase at the time when the goods were even then lying in the UAR.
4. We could easily dispose of the petitioner's present revision by treating the Tribunal's determination as based on its view of the petitioner's evidence, or rather, of the absence of evidence. We may legitimately desist from interfering in revision with the decision of the Tribunal for the excellent reason that it is a decision on facts and the Tribunal had ample materials for rendering its findings on facts. We, however, wish to go into the legal issue raised by the petitioner, because it is one of considerable importance, and it bears on the question of the precise situs of the purchases of Egyptian cotton in this case, even accepting, at face value, the facts pleaded by the petitioner.
5. It is always a vexed question, even under the general law of sale of goods, as to when and where a sale or purchase takes place, or, to put it in technical language, as to when and where the property in the goods passes. In our Sale of Goods Act, 1930, it is enacted that the passing of property from the seller to the buyer would depend generally, on the terms of the agreement between the two parties (see section 19). But to cover cases where the intention of parties is not clear, the Sale of Goods Act lays down certain guidelines (see sections 20 to 24). But these guidelines or tests, in terms, only concentrate on when the property in the goods passes to the buyer. As to where the sale or purchase must be held to take place in given cases, the Sale of Goods Act is notoriously silent. It is no wonder, therefore, that the fixation of the time of sale, and, more than that, the fixation of the place of sale, in given cases, became a matter of unending controversies, involving meticulous and time-consuming efforts at construction of sale agreements as well as the application of the terms of the statute. In this state of affairs, sales tax legislation came to be introduced in this country. It became quite clear that for a taxation measure of this kind bearing on sale of goods, it was necessary that, the situs of transactions of sale and purchase should not be left to be determined by the myriad terms of individual bargains, or the whims of the contracting parties, either. For that would only complicate the task of assessment, and also render decision-making for the taxing authorities a very difficult and prolonged affair. The legislature accordingly laid down certain rules of thumb for the determination of the situs, or locale, of sales and purchases for the special purposes of making good the charge to sales tax. In the all India context, such rules of thumb were found to be quite indispensable in order to demarcate the taxing power of each and everyone of the States and making it fool-proof against the temptation to levy and collect taxes on sales or purchases taking place outside their own borders. Article 286(2) empowered Parliament to make the requisite clarifications. Parliament did so in section 4(2) of the Central Sales Tax Act, 1956. On the language of article 286(1)(a) of the Constitution, Parliament might well have laid down principles to decide under what circumstances a sale or purchase would fall outside all the States in India, that is to say, outside the Indian Union altogether. But section 4(2) of the Central Sales Tax Act, limited itself to fixing the locale of a sale or purchase as between the different States in India alone.
6. Incidentally, the Tribunal, while discussing this issue, did so in terms of section 4(2) of the Central Sales Tax Act, 1956. This, in our judgment, is a misapplication of the section to a situation to which it does not fit in, and was not meant for. For the controversy in the present case is not about an inter-State transaction. The issue is not in which State in India the transaction had taken place. The issue, on the contrary, is whether the purchases by the petitioner, of the Egyptian cotton took place abroad, in the UAR, or in the State of Tamil Nadu. For an answer to this question we have to look elsewhere than in section 4(2) of the Central Sales Tax Act whose focus of legislation, as we explained, is limited to inter-State transactions within India.
7. The petitioner did not name any particular statutory provision in support of its claim, in all the earlier proceedings in this case. It is, however, quite clear that the petitioner's case for exemption stands or falls only on the provisions of explanation (3)(a)(i) to section 2(n) of the Tamil Nadu General Sales Tax Act, 1959. This explanation fixes the situs of sale or purchase with reference to specific or ascertained goods. It lays down that the sale or purchase of such goods must be held to take place at the place where the goods are at the time when the parties conclude their agreement or bargain. Accordingly, the petitioner's case must be examined in the light of these provisions. The petitioner asserted that the consignments of Egyptian cotton purchased by it were specific goods. It was pointed out that the bargain between the petitioner and the three mills related to the whole of the consignments covered by their imports and import licences. It was further stated that at the time the assessee entered into purchase contracts with the three importing mills, the goods were already ascertained and lying in UAR ports. It was accordingly urged before us that this was a case to which the rule in explanation (3)(a)(i) to section 2(n) of the Tamil Nadu General Sales Tax Act must be applied so as to arrive at the finding that the purchases took place at the UAR.
8. These contentions are based, out and out, on the letters addressed by the importing mills to the petitioner as containing the terms of purchase. Accepting the letters at their face value, the question is how far the case of the petitioner has been made out by the contents of those letters. One of the letters is extracted in full in the order of the Appellate Assistant Commissioner. It is said that the letters from the other two mills were also on identical terms.
9. We have perused the full text of the letter extracted in the Appellate Assistant Commissioner's order. The letter does not bear out the petitioner's contention that the goods were specific goods as on the date of that letter. By 'specific goods' means goods already identified, not merely those which are identifiable and which, with an effort in that direction, can be identified, sooner or later.
10. This is how the petitioner's vendors describe the state of the goods as at the date of the contract :
'The consignment is lying in any of the ports of the UAR for shipment.'
The description is as vague as vague can be. The petitioner's vendors have referred to the goods as lying in some port or other of the UAR. This indicate, only one thing : that the UAR has more than one port, probably, a number of them, and the petitioner's vendors did not know for certain in which port and in which place the goods were. We are satisfied that according to the parties' own description the goods are far from specific. They are not only unidentified, but unidentifiable, with only a vague description to go upon.
11. Nor can the goods be regarded as ascertained goods. In the transaction between the UAR cotton merchants and the petitioner's vendors the goods might probably be regarded as ascertained goods, and perhaps, even be regarded as having been appropriated to the import contracts, if we accept that the consignments of goods were made ready for shipment within a few days of the indent. But the pertinent inquiry in the present case is whether the goods were ascertained or unascertained so far as the contracts between the petitioner, on the one hand, and its vendors, the importing mills, on the other, were concerned. It is not the petitioner's case that apart from what the letters of the importing mills stated in a vague fashion, the petitioner had any independent means of ascertaining the goods, much less, utilised those means to actually ascertain the goods. The result is that, on the description to be found in the very terms of the petitioner's contracts of purchase, the goods must be held to be only unascertained goods as on the date of the purchase contracts.
12. Explanation (3)(a)(ii) to section 2(n) lays down where the sale or purchase of unascertained goods takes place. According to this provision, the transaction must be held to have taken place where such goods are at the time when they are appropriated to the contract. In this case, the petitioner has not proved that the appropriation has been made at a time when the goods were outside the State. Having failed in its plea that the goods are specific goods, the petitioner has not proceeded farther to make out an alternative case to the effect that even on the footing that the goods are unascertained goods, the appropriation was made while the goods were in UAR. The petitioner cannot very well place the burden in this regard on the taxing authorities and expect them to prove that the appropriation was in Tamil Nadu State. Even the general law of evidence does not place that kind of burden on the revenue. For the petitioner is in the position of having peculiar knowledge of all the relevant facts, considering that the transactions are its own transactions. Under the taxing statute, the position is a fortiori, the burden is clearly on the petitioner to show in what way the transactions are exempt from, or fall outside, the scope of the taxing provisions. In the absence of materials in that directions, we must accept the finding of the Tribunal that the assessee's purchase of Egyptian cotton under the purchase contracts in question must be held to have taken place inside the State. There is no dispute that the cotton which was the subject-matter of purchase from three importing mills was put into the petitioner's spinning mill and converted into yarn. This makes the cotton the subject of the last purchase in the State, chargeable, at that point, to single point levy under item 2 of the Second Schedule to the Tamil Nadu General Sales Tax Act, 1959. We, therefore, hold that the assessment was properly made in this case and rightly confirmed by the Tribunal in appeal.
13. We are referred to what was described as a 'special term' in the contract between the petitioner and its three vendor mills. Reliance was particularly placed on the following clauses :
'Kindly note that, despite any term to the contrary or not provided herein, the property in the goods shall be deemed to have passed to you when signing this contract. We shall, however, raise the invoice for value as and when goods reach India.'
This special term, however, cannot prevail over the fiscal statute, or bind the taxing department, whatever may be its binding force or merit as between the parties, as a term in the contract. We have earlier mentioned that the rules laid down by sections 20 to 24 of the Sale of Goods Act for ascertaining when the property in goods passes in a given transaction are to be applied only in cases where the intention of the parties cannot be clearly spelt out from the terms of their bargain. Under the Sales of Goods Act, therefore, the parties' intention, if clearly expressed, will always prevail over the statute, for the very purpose of that Act is to regulate the inter se relationship between the sellers and the purchasers of goods. Not so the rules laid down in explanation (3) to section 2(n) of the Tamil Nadu General Sales Tax Act or section 4(2) of the Central Sales Tax Act. For, these rules are special and overriding rules for fixing the taxable event, as between the public exchequer, on the one hand, and the taxpayers, on the other. While the sales tax law takes up sales or purchases as taxable events, and to that extent, goes along with the general law governing such transactions, the legislature has not thereby lost the prerogative of bending the rules of common law to the service of the revenue. The legislature has laid down in the sales tax statutes clear-cut principles of determining the situs of sales and purchase in order to bring about uniformity, certainty, economy in collection, and efficiency in tax management, all of which are desiderata in all fiscal measures. These provisions, if they should serve their purpose at all, must, in reason, override any special terms in private contracts to the contrary. We are, therefore, satisfied that the so-called special contract in this case, adapting the fictional expression 'deemed', in the manner of legislature draftsman, is powerless against the inexorable application of the statutory provisions.
14. Some reported judgments are found cited in the Tribunal's order under revision. However, one of them alone is apposite to the present case, Bengal Corporation v. State of Madras [1965] 16 STC 62. The rest of the decisions deal with the discovery of the situs of purchases or sales in the course of inter-State trade. In all these decisions, the courts had applied section 4(2) of the Central Sales Tax Act, 1956, for resolving the issue, arising in the cases before them, and, in our opinion, very correctly so. The reported case which we have taken up for special mention, Bengal Corporation v. State of Madras [1965] 16 STC 62, which is a decision of this Court, however, deals with a question similar to the one which figures in this case. The controversy before this Court in that case was whether the situs of a purchase of items of machinery was in the United Kingdom or in the State of Tamil Nadu. The learned Judges as appearing from their judgments, have tacitly approached the question from the point of view of section 4(2) of the Central Sales Tax Act, a provision which, as we have earlier pointed out, has pertinence only in inter-State controversies about the situs of sale or purchase. It might very well be open for us to draw a class parallel between section 4(2) of the Central Sales Tax Act and explanation (3) to section 2(n) of the Tamil Nadu General Sales Tax Act. Even so, we cannot apply the one for the other, when each is meant for a different fact-situation and to settle a different controversy.
15. Be that as it may, for the reasons which we have rendered earlier, the petitioner's revision must be dismissed. We accordingly do so with costs, counsel's fee Rs. 250.