TMI Blog1996 (10) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Krishnan and J.R. Das, Advocates, with him), for the respondents. -------------------------------------------------- The judgment of the Court was delivered by S.P. BHARUCHA, J.- These are appeals from the judgments and orders of the West Bengal Taxation Tribunal to which writ petitions filed in the Calcutta High Court by the appellants were transferred. The position being common, the facts that are referred to are the facts of C.A. No. 1622 of 1990, where Hindustan Sheet Metal Limited is the appellant. The State Trading Corporation entered into a contract with the Government Trading Corporation of Iran whereunder 550 metric tonnes (5 per cent more or less) of unblended Assam tea were to be supplied. In turn, STC entered into a contract on 4th August, 1986, with the appellants for the tea, to which a copy of STC's contract with the Iranian buyer was annexed. Pursuant to the contract between STC and the appellants, the appellants purchased from tea auctions the tea to be supplied under the aforesaid contracts. The deliveries of the tea were made to the Iranian buyer under the aforesaid contracts. In June, 1987, the appellants received letters from the auc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es indicated by each exporter. It was in pursuance of this approach that the contracts between STC and the Iranian buyer and the appellants and STC had been entered into; the Iranian buyer had inspected the appellants' samples and accepted the appellants' price. Our attention was drawn by learned counsel to the contract between STC and the appellants, wherein the appellants were referred to as the "shipper" and the Iranian buyer as the "buyer". The contract recited that STC had entrusted the appellants with "the obligation of supply and shipment of 550.000 M/tonnes unblended Assam tea" and the shipper had agreed to perform such obligation in terms of the contract between STC and the Iranian buyer. The tea should be "as per the sample approved by the foreign buyer". The price was quoted and was said to be "inclusive of STC's service charge of 1 per cent of f.o.b. value of the contracted quantity and the same will be recovered from the realisation of export proceeds. All other charges including bank charges for negotiation, LC advising, amendment charges, etc., were to the account of the appellants". Markings would be as required by the Iranian buyer, but the STC's logo would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible, in consultation with the appellants and any agreement arrived by STC thereafter would be final and binding on the appellants; otherwise, such disputes would be finally and exclusively subject to the jurisdiction of Iranian courts and law. Disputes between STC and the appellants would also be settled amicably through negotiations; otherwise, in the manner laid down in the arbitration clause in the contract. Learned counsel for the appellants submitted that under the terms of the contract between the appellants and STC, STC was merely the agent of the appellants and there was no sale of the tea by the appellants to STC thereunder. The sale of the tea was by the appellants to the Iranian buyer. Learned counsel cited from the judgment of this Court in the case of Bhopal Sugar Industries Ltd. v. Sales Tax Officer, Bhopal [1977] 40 STC 42, the following: "It is well-settled that while interpreting the terms of the agreement, the court has to look to the substance rather than the form of it. The mere fact that the word 'agent' or 'agency' is used or the words 'buyer' and 'seller' are used to describe the status of the parties concerned is not sufficient to lead to the irresi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was requisite under the provisions of section 17 of the Tea Act, 1953. Our attention was drawn to the invoice issued by the appellants, which stated that the tea had been sold to the foreign buyers and it was signed by the appellants after stating "A/c. the State Trading Corporation of India Ltd.". The bill of lading issued in respect of the tea by the Irano-Hind Shipping Company Ltd., showed the appellants to be the shippers; the words "A/c. the State Trading Corporation of India Ltd.", were typed immediately after the appellant's name and address in the column "Shipper" only to identify the tea with the contract between the Iranian buyer and STC. Learned counsel drew our attention to the fact that the advantage of duty drawback in respect of the aforesaid contracts had been received by the appellants. In his submission, the property in the tea had not passed from the appellants to STC. The purchase of the tea by the appellants at the auctions was, therefore, the penultimate sale in the course of export and, therefore, exempt from the levy of sales tax by the provisions of section 5(3). Learned counsel for the respondent sales tax authorities submitted that the export sale c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was only to enable the Iranian buyer to identify the tea as being sent in fulfilment of the obligation under the contract between STC and itself. The manner in which the contract between the appellants and STC was executed reinforces our view. The tea export licence for the tea was that of the appellants. The invoice of the appellants showed the Iranian buyer against the column, "sold to", and no objection in this regard was raised by STC. The duty drawback benefit accrued entirely to the appellants. The bill of lading issued by the Irano-Hind Shipping Co. Ltd., showed the Iranian buyer's Teheran Bank as consignee of the tea shipped by the appellants. Certainly, there is no endorsement on the bill of lading in favour of STC that would suggest transference to it of title in the tea. The typing of the words "A/c. the State Trading Corporation of India" below the name and address of the appellants against the column "shipper" does not constitute an endorsement. There was no endorsement upon the bill of lading signed by or on behalf of the Teheran Bank, which is the consignee, or the Iranian buyer. There is, therefore, nothing in the contract between the appellants and STC or in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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