SECTION 6 (2)

This query is : Resolved

SAMRAT (Querist)
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08 July 2009 Respected all,

I m having one querry.

Suppose there are 3 parties

A FROM MUMBAI
B FROM BHIWANDI
C FROM TAMILNADU

IF A PLACES ORDER ON B FOR THE GOODS.

B SINCE NOT HAVING GOODS IN GODOWN, INSTEAD OF PURCHASING FROM C , B PLACED ORDER WITH C, & REQUESTED THEM TO SEND THE MATERIAL DIRECVTLY TO A.

PLEASE SUGGEST ME,

CAN WE INTERPRETE AS BELOW.

A SHOULD RECEIVE GOODS FROM C.

A SHOULD RECEIVE THE BILLING FROM B.

EVEN THOUGH A & B ARE IN MAHARASHTRA, B SHOULD MENTION IN IT'S BILL SALE "AGAINST C FORM" & CHARGE 2 %.

A SHOULD GIVE "C" FORM TO B.

B SHOULD GIVE "E1" FORM TO A.

AM I CORRECT???

PLS DO THE NEEDFULL.

SAMRAT

Vishnu Saboo

Vishnu Saboo (Expert)
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09 July 2009 A can receive the material from C,
C shall bill to B, and consignee adress to A, and A shall bill to B with full amount as per contract, enclosing invoice receivd from C.A should give "C" form to B, and accordingly B should E1 to A.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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09 July 2009 Form Requirements:

A will give 'C' form to B
B will give 'C' Form to C.

Most Important:

C will give 'E1' form to 'B'.

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Amit Sheode

Amit Sheode (Expert)
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09 July 2009 Friends,
Pls see the SC judgement in the matter of A & G Technologies 19 VST 239(SC).
Firstly the present transaction comes under Sec 3 i.e. Inter State Sale. Secondly there are two sales involved one is from B to A & another is from C to B. Thirdly there is a consistent case law stream mandating that if the sale occasions inter state movement then it cannot be effected by transfer of documents. Hence in the present matter
1. The dealer B should claim Sales u/s 3 Ist limb i.e. sale occasioning inter state movement as per the theory of inextricable link. The said theory is established as per SC judgments in K G Khosala, Indian Explosives etc
2. The present difficulty is due to the judgment in A & G sale by transfer of documents is not admissible. Hence there is no issue of E1 forms etc since the form is for sale u/s 6(2). For the sale to be under Sec 6(2) it should fall under second limb of section 3. Since the present sale would be under first limb that is not correct & the dealer may end up incurring the liability.