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2009 (3) TMI 944 - KARNATAKA HIGH COURTRelationship between the petitioner and the procurement agency as principal and agent - whether the authorities have committed error in holding that the purchases of the commodities by the procurement agency was for and on behalf of the petitioner and that there was no instance of sale between the procurement agency and the petitioner? Held that:- The perusal of the copies of the orders of the appellate authority and that of the Tribunal produced along with these petitions would clearly indicate that the assessing authority referring to various terms and conditions contained in the agreement entered into between the petitioner and the procurement agency and also having regard to the manner in which the scheme is operated has held that the relationship between the petitioner and the procurement agency is that of principal and agent and that the purchases made by the procurement agency was for and on behalf of the petitioner. The procurement agency only gets a fixed amount of commission. The goods stored in the godowns are treated as stocks of the petitioner and the petitioner pays charges payable to the warehousing corporations. The goods are insured at the cost of the petitioner. Therefore, when the commodities procured are transferred to the petitioner, it cannot be said that there was an instance of sale. It is only when the petitioner sells the procured commodity to different organisations, it attracts payment of sales tax. Under the circumstances we see no error of law or facts in the orders of the Tribunal and other authorities. If the petitioner has paid sales tax to the procurement agencies when the procured commodities were transferred, as held by the appellate authority, the petitioner is entitled for set-off of such amount. Therefore, no prejudice is caused to the petitioner and its apprehension that it is made liable to pay the tax twice has no substance. In view of the above discussion, we see no merits in these petitions and therefore there are no grounds to admit them.
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