TMI Blog1979 (10) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the goods. The assessing officer did not accept this plea and finally determined the total and taxable turnovers at Rs. 4,34,283.92 and Rs. 1,28,767.53 respectively. The assessee appealed to the Appellate Assistant Commissioner and contended that it acted only as an agent of its members collectively, procuring their respective quota of allotment of dyes and art silk yarn required by them and that its transactions are not liable to tax. In this connection, it relied on a decision of this Court in National Chamber of Commerce v. State of Madras[1970] 25 S.T.C. 185. The Appellate Assistant Commissioner accepted these contentions and allowed the appeal. The Board considered that the order of the Appellate Assistant Commissioner was erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the members and their requirements on the basis of actual consumption. 30.8 metric tonnes of hydros was released in or about September, 1969, for distribution to the handloom industry in Tamil Nadu. Out of the said quantity the assessee-association was allotted 350 kg. of hydros packed in 50 kg. drums. The value was Rs. 12 per kilogram plus 3 per cent Central sales tax with C form ex godown, Bombay. The State Trading Corporation was to intimate the amounts to be paid by the association towards the allotment. The allotment was made subject to the condition that it should be distributed only to the members in the presence of the Textile Control Officer concerned, in accordance with his instructions. Any violation of the condition was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of these facts that we have to consider the liability of the assessee to sales tax. There are three aspects to be examined in this connection. The first is that the assessee has been incorporated as a limited company. The question is whether, as a consequence of incorporation, it is a separate entity independent of its members, so that it could be taxed on its dealings with the members. It has been held in cases arising under the parallel legislation, namely, the Income-tax Act, that, as a general rule, the fact that a mutual association is incorporated as a company would not affect its mutual character or does not destroy the complete identity between the association and its participants: see Kanga Palkhivala's Income Tax, 7th Edn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he distribution of the goods allotted to the members. It did not have, in the real sense, any property in the goods which it transferred in favour of the members. Before the Board, the assessee placed reliance on a decision of this Court in National Chamber of Commerce v. State of Madras[1970] 25 S.T.C. 185. In that case, the assessee was registered under the Societies Registration Act and it was also a dealer under the Madras General Sales Tax Act. It impored art silk, dyes and chemicals from abroad on the strength of the actual users' licences held by its members, and distributed them to the respective members and collected the sales tax thereon. The department assessed these transactions to sales tax, not only on the basis of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency transactions. Therefore, the fact that the assessee gave the C forms would not stand in the way of its being a mere intermediary or a go-between so as not to be a dealer. On the facts here, we are satisfied that the assessee's claim was rightly accepted by the Appellate Assistant Commissioner and the order of the Board is erroneous. The appeal is accordingly allowed with costs. Counsel's fee Rs. 250. In T.C. No. 324 of 1976, the facts are identical with those discussed in T.C. No. 84 of 1976. We do not think it necessary to discuss the facts over again here. For the reasons given in T.C. No. 84 of 1976, this appeal is also allowed with costs. Counsel's fee Rs. 250. Appeals allowed. - - TaxTMI - TMITax - CST, VAT & Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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