HC
grants relief to WS Retail, sale of mobile phones, computer spare parts and
personal healthcare products via online portal, qualify as an ‘inter-state
sale’, not liable to local sales tax / VAT; Notes assessee’s contention that
for purpose of delivery of goods within Union Territory of Puducherry, assessee
installed a delivery hub in Puducherry - E-Kart logistics, which acts as a
sorting
facility to sort deliveries and that there is no sale or inventory
holding transactions effected therefrom; Referring to judicial precedents in
case of K. G. Khosla & Co.(P) and Tata Iron And Steel Co, HC culls out the
legal principle to be satisfied for determining whether a transaction is an
‘inter-state sale’ and states that, primordial test for an interstate sale is that
sale should have occasioned movement of goods or movement should have been
incidental to sale; Observes, it is not disputed that when purchaser exercises
his option to purchase goods via online platform, they are outside the State of
Puducherry (i.e. in Karnataka), and thus, such exercising of option of purchase
occasions the movement of goods, which is also demonstrated by perusal of
purchase order; Rejects Revenue contention that, consignor and consignee both
being assessee since consignment moved from Karnataka to Puducherry on “self
basis”, sale to customer in Puducherry would amount to local sale and
transaction from warehouses hub to delivery. hub is only a stock transfer;
Relying on Rukmini Mills, HC states that merely because a weigh bill has been
drawn in the name of 'self' would not per se be a reason to disbelieve the
nature of transaction and to treat it, as a local sale; Relying on Sahney Steel
ruling, HC states that presence of depot at Puducherry cannot make transaction
local since purchase effected is for a particular product on exercise of option
to purchase, a bill is raised in the name of purchaser and identified product
ordered by purchaser is sent to Puducherry, thus appropriation takes place in
State of Karnataka; As regards question whether situs of saiddepot would be a
relevant factor, refers to SC ruling in Onkarlal Nandla and states that, since
purchase contract comes into an effect the moment, a purchaserexercises option
through online platform, purchase invoice is generated in his name and purchase
occasions in movement of goods, therefore, situs can be in any either one of
the States; Also, refers to Kerala HC ruling in Flipkart Internet and Ors which
quashed penal proceedings against Flipkart for e-commerce sales to customers within
State : Madras HC
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