TMI Blog1970 (3) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Commercial Tax Officer (Overflow Assessment), Andhra Pradesh, by his assessment order dated 30th March, 1966, finally assessed the petitioner-company to tax under the Central Sales Tax Act on a turnover of Rs. 10,14,895.81 and held that a tax of Rs. 1,01,489.60 was payable. The petitioner-company invokes the jurisdiction of this court in W.P. No. 1316 of 1966 to quash the said order as illegal and also as ultra vires of the powers of the Commercial Tax Officer and that of the State of Andhra Pradesh. It is stated that under an agreement dated 13th August, 1962, the petitioner-company was appointed as the sole selling agent for the sale of chemicals and other products manufactured by M/s. Tata Chemicals, Bombay, whose factory is at Mithapur in the State of Gujarat, in the whole of India for a period of three years from 1st July, 1962, to 30th June, 1965. For the subsequent period also the said agreement was continued. The petitioner-company, while submitting its return for the year 1964-65, claimed exemption on seven items covering a turnover of Rs. 10,19,566.49 on the ground that they relate to inter-State sales effected in Bombay and Gujarat States in respect of which no sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radesh and therefore the "appropriate State" under the Central Sales Tax Act to bring the above turnover to tax is the State of Andhra Pradesh. In that view, he held that the turnover of Rs. 11,716.07 was liable to tax. The turnover relating to items (4) to (7) pertains to the sales of goods manufactured by M/s. Tata Chemicals, Mithapur, Gujarat State, through the petitioner-company to various customers in the State of Andhra Pradesh. In respect of these transactions, the petitioner-company on receiving orders from the customers, either directly or through its distributors forwarded indents for the goods to the factory of M/s. Tata Chemicals Ltd. at Mithapur. Thereupon M/s. Tata Chemicals Ltd. used to directly despatch the goods to the destinations indicated by the customers and forward the railway receipts made out in favour of the petitioner-company to the petitioner-company along with pro forma invoices to indicate the amounts to be charged to the customers. On receipt of these documents, the petitioner-company prepared regular invoices and sent them to the customers with the railway receipts endorsed in their favour. It is claimed by the petitioner-company that it was appoint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " having jurisdiction to assess the petitioner-company to tax under the Central Sales Tax Act. The petitioner-company preferred an appeal against the assessment order to the Assistant Commissioner of Commercial Taxes and applied for stay but the stay petition was dismissed without recording any reasons. A revision petition filed against the said order before the Deputy Commissioner for Commercial Taxes was also dismissed without assigning any reasons. Subsequent to the above, the Deputy Commissioner, Commercial Taxes, Hyderabad Division, issued two notices under section 9(3) of the Central Sales Tax Act read with section 14(4)(c) and section 20 of the Andhra Pradesh General Sales Tax Act and the Rules made thereunder for the assessment years 1961-62 and 1962-63. By notice No. TAC. 1/1810 of 1966-Asst. No. 1464/61-62 dated 30th September, 1966, the Deputy Commissioner, Commercial Taxes, Hyderabad Division, proposed to revise the assessment orders relating to assessment year 1961-62 by including a turnover of Rs. 15,80,476.92, and assessing the said turnover to tax at 7 per cent. By another notice No. TAC. 1/34321/66-Asst. No. 1464 of 62-63 dated 8th August, 1966, the Deputy Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of India in the manner provided in subsection (3) in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within subsection (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods." A sale or purchase of goods as per section 3 shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. The learned Government Pleader relying upon a decision of the Supreme Court in Tata Iron and Steel Co., Ltd. v. S.R. Sarkar[1960] 11 S.T.C. 655 (S.C.). contends that for sales in the course of inter-State trade or commerce which fall under clause (b) of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reached directly the destinations of the customers in the State of Andhra Pradesh. The first question that falls for consideration in regard to this turnover is whether the petitioner-company acted as a commission agent as contended by it or as a commercial agent as held by the Deputy Commercial Tax Officer. That turns upon the terms and conditions subject to which the petitioner-company was appointed by the manufacturers as its sole selling agent for the Union of India and also upon the method adopted in effecting the sales to the customers. The terms of the appointment of the petitionercompany as the sole selling agent of the manufacturer is evidenced by a letter dated 13th August, 1962. The more important terms of the said agreement are as follows: "We have pleasure in renewing your appointment for a further period of three years from 1st July, 1962, to 30th June, 1965, as the sole selling agents for the Union of India for our principal products comprising alkalies, heavy chemicals, marine products and vacuum salt on the following terms and conditions: (1) You will sell under our direction the entire output of these products.......... (2) * * * (3) You will cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stocks held at the end of each month.......... " This agreement clearly shows that the petitioner-company was merely entitled to receive commission for the sales of the products manufactured by M/s. Tata Chemicals Ltd. Though the description of the petitionercompany as the sole selling agent may not by itself be decisive of the matter the fact that it was under an obligation to sell under the directions of and at the prices fixed by the manufacturer, that it was to assume all "del credere risks" and that it was to return the empties at a reasonable delivery charges, that the manufacturer himself was liable to bear all expenses in respect of rebates, insurance charges, leakage, wastage, freight and forwarding charges, customs and clearing, that the petitioner-company was to render a progressive sales statement to the manufacturer every week showing the sales made in the week, together with a remittance of 75 per cent. of the actual sales and settle the final account for a particular month by the 20th day of the following month, leaves absolutely no doubt that the petitioner-company was merely a "commission agent" and not a "commercial agent". The learned Government Pleader, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not liable to be assessed to tax under the Central Sales Tax Act. Assuming that this sale was effected by the petitionercompany itself in favour of the customers in the State of Andhra Pradesh as the documents relating thereto are endorsed by the petitioner-company in favour of the customers in the State of Andhra Pradesh and as a consequence thereof, it amounted to a sale in the course of inter-State trade or commerce, even then as the movement of goods commenced from the State of Gujarat in the course of inter-State trade or commerce, in view of section 9(1) of the the Act as it stood on the relevant dates, it is the State of Gujarat from where the movement of goods commenced that has jurisdiction to assess this turnover to tax and collect the same. For the foregoing reasons, the assessment of the above turnover to tax under the Central Sales Tax Act for 1964-65 by the Additional Commercial Tax Officer (Overflow Assessment), Hyderabad, and the subsequent orders passed on appeal and revision must be quashed. For the same reasons, the Deputy Commissioner for Commercial Taxes, Hyderabad Division, must be held to have no jurisdiction to revise the assessments for the other asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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