TMI Blog1996 (10) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of tax. Thus the High Court, therefore, was not justified in taking the view that it was not a sale transaction assessable to tax. - Civil Appeal No. 2348 of 1978, 8605 of 1983, 2322, 2323 of 1980, 4104 of 1984, 3328 of 1983, & 12778-12787 of 1996, - - - Dated:- 4-10-1996 - BHARUCHA S.P. AND FAIZANUDDIN JJ. V. Krishnamurthy and A. Mariarputham, Advocates, for the appellant. R. Mohan, Senior Advocate (R. Nedumaran, V.G. Pragasam, R.A. Perumal, K.R. Choudhary and R.K. Sharma, Advocates, with him), for the respondents. -------------------------------------------------- The judgment of the Court was delivered by FAIZAN UDDIN, J. -Leave granted. Since common questions of law and facts arise for our consideration in these appeals and special leave petitions, the same are being disposed of by a common judgment. The appeals and special leave petitions arise out of an order passed by the High Court of Madras in revision preferred by the respondent herein, under section 38 of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act") relating to certain transactions involved therein which are sought to be taxed as sale. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A for the sake of convenience. Then "A" sends back the same to the company duly filled up mentioning the number and name of article in the blank spaces. On receipt of the said coupon/order form, three order forms are sent to A, by V.P.L., for Rs. 16 and when the said V.P.L., is cleared by A, he receives a further letter from the company acknowledging the receipt of Rs. 16. The said letter reads as follows: "We are glad to note that you have cleared the V.P.L. No. by paying Rs. 16 and thank you very much for the same. You please sell three order forms to three members and take that money. Fill the three forms addressing correctly of three members (in block letters) and send them to us by registered post. We will send to each among three members containing three order forms in each V.P.Ls., for Rs. 16. If all of them clear the V.P.Ls., paying Rs. 16 each, we will send you the required article item No. by registered post." After receipt of the three order forms/coupons, A delivers them to B, C and D after collecting Rs. 5 from each of them which amount is appropriated by A himself. Then, B, C and D in turn will either forward the coupons themselves to the company or send the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1967-68 from the value of articles supplied to various persons came to Rs. 1,36,665 which was liable to be taxed under section 3(1) of the Act. The assessing officer also imposed a penalty of Rs. 6,149 under section 12(3) of the Act for failure of not filing the return in form A-1. This order of the Assessing Officer found favour with the Appellate Assistant Commissioner as well as the Sales Tax Appellate Tribunal. The respondent-assessee then went up in revision before the High Court of Judicature at Madras. The High Court of Madras took the view that the transfer of article by the company was not for money consideration alone and, therefore, it would not be a sale at all. Consequently, the High Court held that since the transactions involved in the scheme of the assessee are not sale, the assessees are not liable to be taxed as sales under section 3(1) of the Act and, therefore, allowed the revision, set aside the order of the Assessing Officer, Appellate Assistant Commissioner and the Tribunal against which these appeals and special leave petitions have been directed as the orders in the connected appeals and the special leave petitions are based on the orders and findings r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated earlier, in the foregoing paras of this judgment, the coupon of the company is sold to the customer A on payment of Rs. 5. Whereafter, the customer A receives three coupons for Rs. 16 which he sells to three persons for Rs. 5 each and appropriates the amount so received by himself. When each of the three parties, to whom the coupons are sold by A, further sell their coupons to others namely B, C and D, one cycle is completed and the customer A in turn receives the article of his choice as mentioned by him in the coupon from the company. In this process, as stated earlier, the company despatches a letter to its customer A advising him to sell the three order forms to three members and take that money himself. Not only this, the assessee-company further addresses a letter to the customer A in the printed form conveying their thanks to him and that they have received three original order forms and the letter, stating further that as soon as the V.P.Ls., are cleared by paying Rs. 16 each, they will send him the required article by registered parcel. Thereafter, the company ultimately despatches the article of his choice to the customer A with a covering letter advising him to rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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