TMI Blog1958 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... goods exported outside India. The Deputy Commercial Tax Officer assessed the plaintiff to sales tax on the entire sum of Rs. 43,03,171-15-6. The company preferred an appeal against this order of assessment to the Commercial Tax Officer, North Madras. The appellate authority validated the licence in favour of the plaintiffs as agent of known principals and in consequence exempted that portion of the turnover which represented the value of the goods sold on behalf of the resident principals, confirmed the original assessment in regard to the balance of Rs. 20,88,407-3-10 and levied a tax of Rs. 21,207-6-2. The company contested the correctness of this order in a revision petition to the Board of Revenue but the attempt was not successful. C.S. No. 51 of 1951 out of which O.S.A. No. 29 of 1955 arises was filed by the appellant against the State of Madras represented by the Collector of Madras for a declaration that the assessment made by the Commercial Tax Officer was illegal and void. For the year 1948-49 the Deputy Commercial Tax Officer, Mannady Division, Madras, assessed the appellant to sales tax on a turnover of Rs. 36,69,741-3-3. The plaintiff preferred an appeal to the Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on agents, that the sales to foreign buyers took place at Madras, that though tea and rubber were agricultural produce the plaintiffs would not be entitled to the exclusion of their sales from the computation of the turnover as the principal for whom the appellant was acting was non-resident foreigner. The learned Judge also held that tea and rubber were produced outside the State of Madras. On those findings the two suits were dismissed with costs. The plaintiffs have filed the appeals against the judgments. Mr. G.R. Jagadesan appearing for the appellant did not contest the assessment for the year 1949-50 but confined his arguments only in regard to assessments for the years 1947-48 and 1948-49. Substantially the contention on behalf of the appellant centred on two grounds of exemption, viz., (1) under section 2(i) which exempts sale of agricultural produce, and (2) under section 5(v) which exempts sale of tea intended for and delivered outside the State of Madras. On behalf of the State both these claims were contested on the ground that both tea and rubber were not grown by the assessee but only by his non-resident foreign principal. Under section 3(1) of the Madras General Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the same as the one relevant under section 2(i). Two questions therefore arise for determination in the appeal, viz., whether the appellant as commission agent would be entitled to the exemption contemplated by section 2(i) and section 5(v) of the Madras General Sales Tax Act in respect of the sales of goods which were grown in the estate of its non-resident principal; (2) whether the sales sought to be assessed were for delivery outside the State and delivery was actually so made.Before considering the two questions set out above it is necessary to refer to one matter which the learned Judge decided against the appellants. The learned Judge held that the land on which tea was grown was outside the State. We are not able to ascertain from the record as to how this question arose. The claim of the appellant was not resisted by the respondent on this basis. There was no plea, issue or even evidence that the lands on which tea was grown were outside the State of Madras. In all the assessment proceedings it was assumed that the lands were within the State. We should therefore proceed on the basis that for the purpose of these appeals the tea and rubber were grown on lands situated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of any moneys payable to the non-resident by the agent, a sum equal to the amount of the tax or taxes assessed on or paid by the agent. (iv) Where no tax would have been payable by the non-resident in respect of his business in the State by reason of the turnover thereof being less than the minimum specified in section 3, sub-section (3), he shall be entitled to have the amount of the tax or taxes paid by his agent, refunded to him on application made to the assessing authority concerned, or where more than one such authority is concerned, to such one of the authorities as may be authorised in this behalf by the State Government by general or special order. (v) such application shall be made within twelve months from the end of the year in which payment was made by or on behalf the nonresident of the tax or taxes or any part thereof." It is clear from the provisions of this section that it is really the non-resident principal that is assessed to tax and the agent is deemed to be a dealer in respect of his business as a convenient representative for assessment, levy and collection of the tax. The assessment is with reference to the sales on the principal's account and the rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in refund only in such a case. The matters dealt with under section 2(i) and section 5(v) relate to other exemptions from taxation and in the absence of a provision like section 14-A(ii) in regard to such exemptions there is no scope for assessment in respect of agricultural produce or tea intended for and exported to another State. There is nothing in section 14-A or in any other provisions of the Act to tax the exempted goods in the hands of the agent leaving it to the principal to obtain refund. In the decision in T.R.C. Nos. 38 to 40 of 1955, to which reference has been made already, the learned Judges held that there is no provision anywhere in the Act or in the rules by which the non-resident principal might be entitled to obtain a refund of the amounts covered by the exemption under the definition of "turnover" in section 2(i) but collected from the agent. In that case the question arose whether a commission agent who acted for a non-resident principal could claim on behalf of his principal exemption from paying tax on business in respect of an agricultural produce sold by the agent but which was grown by the principal on his land, and the learned Judges held that he could. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant would be entitled to the exemptions under section 2(i) in regard to the sale of rubber during the period of assessment and of tea till 1st January, 1948. The second question relates only to the exemption claimed under section 5(v). In that case the appellant should prove further that the sale of tea was for delivery outside the State and that the delivery was actually made outside the State. Although the appellant pleaded that he was entitled to the exemption under section 5(v) no evidence was let in in regard to the place of delivery. The learned Judge found, a finding which is not challenged by the learned advocate for the appellant, that the property in the goods passed to the buyer at Madras. The place where property in the goods passed to the buyer need not necessarily be the place of delivery. The place of delivery is regulated by agreement between the parties. Benjamin in his book on Sale stated at page 685: "There is no branch of law of sale more confusing than that of delivery. The word is unfortunately used in very different senses and these should be borne in mind. The word delivery is sometimes used with reference to the passing of the property in the chattel; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State of Madras with railway receipts in the name of the buyers as consignees. Though ultimately the goods were sent to Cochin State the passing of the property in the goods was complete within the State of Madras. The learned Judges held that actual delivery of the goods to the buyer was within the State of Madras and the consumption in the Cochin State cannot imply a second delivery there and that therefore the sales were liable to tax. In this case the goods were actually delivered within the State of Madras and we are not able to appreciate how it can advance the case of the respondent. It has been said that a c.i.f. contract is an agreement for the sale of goods to be performed by the delivery of documents and not a mere sale of documents. The law as to passing of property in the goods by indorsement of a bill of lading has been stated in Sanders v. Maclean (1883) 2 Q.B. 327 at 341. by Bowen, L.J., as follows: "A cargo at sea while in the hands of the carrier is necessarily incapable of physical delivery. During this period of transit and voyage the bill of lading by the law merchant is universally recognised as its symbol and the indorsement and delivery of the bill of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 286(1)(a) means delivery of the goods to the purchaser or his agent, and delivery to the common carrier is not actual delivery." The importance of this question does not appear to have been realised when the case was presented at trial. The contracts have not been produced and no evidence was tendered as to in whose name was the bill of lading taken and as to whether the banker at Madras was the agent of the buyer or seller. The learned Judge has stated in his judgment that goods "were shipped f.o.b. Cochin and c.i.f. foreign ports" and that the goods were deliverable in foreign countries. Having regard to the large number of transactions all of which may not be of the same pattern, evidence of a more specific kind with particular reference to the place where the goods were delivered would be necessary before the claim for exemption can be satisfactorily adjudicated. Two questions may arise: (1) What was the kind of delivery contemplated and effected by the parties and this will depend to a large extent on the nature of the contract between the parties. (2) In view of the fact that section 5(v) contemplates actual delivery, questions may arise whether in f.o.b. and c.i.f. contra ..... 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