TMI Blog1958 (4) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay party. Incidentally, the goods sent by the appellant were not the same as the goods originally purchased by him. There has been blending according to the instruction of the Bombay party and that also indicates that the sale of the goods by the appellant to the Bombay party had preceded the blending of several teas which was done under the instructions of the Bombay party on the basis that the title in the goods had already passed to the Bombay party. In that view of the matter section 5(2)(a)(v) of the Act would be wholly inapplicable. Appeal dismissed. - Civil Appeal No. 300 of 1956, & 665 of 1957 - - - Dated:- 7-4-1958 - DAS S.R., VENKATARAMA AIYAR T.L., DAS S.K. AND GAJENDRAGADKAR P.B. AND VIVIAN BOSE JJ. H.N. Sanyal, Additional Solicitor-General of India and B. Sen, Senior Advocate, P.K. Bose, Advocate, with him, for the respondents (in both the appeals). Veda Vyas, Senior Advocate, S.C. Mazumdar and R. Banerjee, Advocates, with him, for the appellant (in both the appeals). -------------------------------------------------- The Judgment of the Court was delivered by GAJENDRAGADKAR, J. -Civil Appeal No. 300 of 1956.-The appel- lant Gor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign or inter- national trade. Under instructions of the said principals, bill of lading for the said teas worth Rs. 5,74,422-7-3 were made out in the names of the said principals as the consignors and the consignees were sometimes the principals themselves and sometimes foreign parties. The appellant alleged that all the said acts and services were done by him in the usual course of business as an agent for the said principals in respect of the said teas. According to the appellant the total cost of the teas thus purchased came to Rs. 4,37,656-0-9 whereas the expenses incurred for handling the goods and dealing with them from the stage of purchase to shipment including the appellant's commission at 11 % came to Rs. 1,36,766-6-6. That is how the total value of the goods were shown as Rs. 5,74,422-7-3. It was in respect of this amount that the appellant claimed exemption under section 5(2)(a)(v) of the Act. The Commercial Tax Officer allowed the claim for exemption under section 5(2)(a)(ii) of the Act in full, but in regard to the exemption claimed by the appellant under section 5(2)(a)(v) he disallowed it to the extent of Rs. 5,74,422-7-3 on the ground that the relevant bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly pressed before them and they held that the plea for exemption under Article 286(1)(b) was not well-founded because the sales in which the appellant was interested were completed as soon as the goods were appropriated to his contracts with the Bombay parties and whether subsequently the Bombay parties consigned the goods to themselves at some place outside India or to other parties was no concern to the appellant. It is against this appellate order that the present appeal has been brought to this Court by the appellant by special leave. The first point which has been raised before us by Shri Veda Vyas on behalf of the appellant is that the High Court was in error in rejecting the appellant's case that, in purchasing the teas in question at the public auction in Calcutta, the appellant was acting merely as an agent for his principals in Bombay. The argument is that, since the appellant purchased the goods not as a dealer for himself or on his own behalf but as an agent for and on behalf of his principals in Bombay, the transactions cannot be treated as a part of the appellant's turnover which could be taxed under the Act. In our opinion there is no substance in this argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay parties and in consequence property in the goods immediately passed in favour of the Bombay parties and so the despatch of the goods outside West Bengal was not on behalf of the appellant but was by and on behalf of the Bombay parties. Shri Veda Vyas contends that, in recording this finding, a new case has been made against the appellant by the courts below. We are not impressed by this argument. It must be remembered that the only case which the appellant set out before the Sales Tax Authorities was that he was not a dealer in respect of the goods in question but was acting as an agent for the Bombay parties. No attempt was made by the appellant to make out the alternative case that, in case he was a dealer in respect of the goods, title to the goods did not pass in favour of the Bombay merchants until the goods left West Bengal. It was only during the course of argument on the writ petition before Sinha, J., that this point was raised; and in dealing with the point the learned Judge had natu- rally to consider the question as to when the goods were appropriated towards the contract in favour of the Bombay merchants. Therefore the grievance made by Shri Veda Vyas that in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay party said "Out of our purchased stock please make two blends according to the attached blend list and ship after packing and marking as directed in the list". It would thus be clear that the Bombay party has consistently described the goods as its own and minute directions have been given to the appellant as to the manner in which they should be packed and he has been asked to ship or otherwise transport the goods in the name of the Bombay party. If the appellant agreed to comply with these directions it was obviously because he wanted to do a good turn to his customer. Since the title had passed to the Bombay party the appellant would naturally be entitled to charge for the services rendered by him in the matter of the blending and packing of the goods. He was also allowed to charge the agreed commission. It is well known that sellers are interested in rendering and agree to render such services to their constituents in order to cultivate their goodwill. That is why it would be erroneous to attach undue importance to the fact that the appellant included the other incidental and subsidiary charges in his bill and formally made those charges a part of the price. It cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the sale made by the appellant would equally exclude the application of Article 286(1)(b) of the Constitution. The scope and effect of the provisions of Article 286(1)(b) have been considered by this Court in two decisions which are frequently described as the two Travancore cases. In The State of Travancore-Cochin and Others v. The Bombay Co. Ltd. [1952] S.C.R. 1112; 3 S.T.C. 434., it has been held by this Court that sales and purchases which themselves occasion the export or import of the goods as the case may be out of, or into, the territory of India come within the exemption of Article 286(1)(b). It appears from the judgment of Patanjali Sastri, C.J., that the argument urged before the Court in respect of the true construction of Article 286(1)(b) ranged over a very large field and as many as four different constructions were placed before the Court for its acceptance. The first of these was treated by the Court as unduly narrow and the last as unduly wide. In the result this Court held that the transactions in question in the three appeals which were finally disposed of by this judgment attached the provi- sions of Article 286(1)(b). It was observed by the learned Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt was not drawn in the case of The State of Mysore etc. etc.Civil Appeals Nos. 66 to 73 of 1957-Judgment delivered on February 11, 1958; Since reported in [1958] 9 S.T.C. 188. We are, however, not impressed by this plea. We hold that, in view of the two Travancore decisions and particularly in view of the recent decision in The State of Mysore etc. etc.(1), it would be impossible to accept the plea that the sale effected by the appellant in the present case can claim the protection of Article 286(1)(b) of the Constitution. Shri Veda Vyas relied upon the decision of the Bombay High Court in M/s. Daulatram Rameshwarlal v. B.K. Wadeyar [1957] 8 S.T.C. 617; A.I.R. 1958 Bom. 120 as well as the deci- sion of the Madras High Court in Gandhi Sons, Ltd. v. The State of Madras(3). We are satisfied that these decision do not support the appel- lant's case. In the case of M/s. Daulatram Rameshwarlal v. B.K. Wadeyar [1957] 8 S.T.C. 617; A.I.R. 1958 Bom. 120., the Bombay High Court found that the exporter got the delivery of the goods by means of the documents of title after they had crossed the customs barrier and so it was impossible to suggest that he could have made by other use of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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