TMI Blog1959 (11) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... te. The appellants would then buy cotton at that rate by fixing up their contract with the seller-ryots or sellerdealers at Guntur arranging time for delivery. They would then get the contract form signed by the seller as well as by themselves as agents. The buyer's i.e. the principal's signature would be taken later on. The quantity offered for sale would be tested and the bales would be marked with the mark of the principal's company and 80 per cent. of the cost price would then be paid as advance by the assessee. After the pressing and weighing of cotton is done, the balance of 20 per cent. of the cost price would be paid to the seller-ryot or seller-dealer as the case may be. As and when the wagons are available the bales of cotton would be carted and despatched as per the principal's instructions. Money is usually received from the principal by T.T. just before the agent takes delivery from the ryot. The assessee-firm would charge pressing, cleaning and incidental charges together with the sales tax, commission, dharmam etc. to the principal. For the year 1954-55 the assessee-firm was assessed in accordance with the provisions of section 5(2) of the General Sales Tax Act read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that- (i) in respect of the same transaction of sale, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed; (ii) where a dealer has been taxed in respect of purchase of any goods in accordance with the rules referred to in clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him." Section 5 which provides for exemption and reduction of tax in certain cases in its sub-clause (ii) provides thus: "(ii) The sale of cotton (including kapas) and of cotton yarn other than handspun yarn shall be liable to tax under section 3, sub-section (1), only at such single point in the series of sales by successive dealers as may be prescribed and only at the rate of one half of one per cent. of the turnover at that point." "Sale" as defined in section 2(h) means every transfer of property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, and "turnover" means the total amount for which goods are either bought or sold. It is clear from the above provisions that the levy of general tax on sale being the obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed. That being the case, the assessee cannot make a grievance of the fact that his purchase has been subjected to the levy of tax. What is in fact complained of is that section 5 itself does not provide for the levy of such tax on purchases but only on sales and rule 4-A(iv)(b) which subjects the purchasers to tax is therefore inconsistent with this provision. We do not find any warrant for such conclusion from the language of the provision. Besides, section 5 of the General Sales Tax Act only provides for cases of exemption and reduction of tax and in fact section 3 is one of the main charging sections. In its sub-clause (4) it contemplates rules to carry out the policy of that section and other provisions of the Act including the proviso to sub-clause (5) which specifically states that either buyer or seller but not both shall be taxed. The rules, it may be noticed, come into force only on approval by a resolution of the Legislative Assembly. Such approved rules therefore which advance the purpose or object of various provisions of the Act within the allotted field covered by item 54 are not open to question. Rule 4-A (iv)(b) indeed precisely prescribes the single point as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by railway wagons to the Bombay dealers. He charges commission for the same together with all the other incidental charges and also sales tax and it is this agent who in fact pays the amount to the sellers in the State in two instalments first 80 per cent. as advance and then 20 per cent. as final payment after testing, weighing and pressing operations are completed and the bales are taken delivery of by the petitioner. G.O. 319 dated 10th July, 1951, no doubt exempts all agents but for the three categories of agents specified therein, but the agents such as the assessee who handle goods or documents of title relating to goods and make payments of money are not so exempt. Thus this plea also fails. Now the last contention is that the sale being of an inter-State character, Article 286(2) of the Constitution would operate as a ban on the imposition of tax by the State Legislature. Article 286(2) reads thus: "Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce: Provided that the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atarama Ayyar, J., at pages 583 and 584 in this behalf are to the following effect: "A sale could be said to be in the course of inter-State trade only if two conditions concur: (1) A sale of goods, and (2) a transport of those goods from one State to another under the contract of sale. Unless both these conditions are satisfied, there can be no sale in the course of inter-State trade. Thus, if X, a merchant in State A goes to State B, purchases goods there and transports them into A, there is undoubtedly a movement of goods in inter-State commerce. But that is not under any contract of sale. X might be entitled under Article 301 to certain rights in the matter of transportation. But Article 286(2) has no application, as there is no sale in the course of inter-State trade or commerce. In the same illustration, if X after transporting the goods into State A sells them, then also there is no sale in the course of interState trade. It is true that there is a sale, and there is also a movement of goods from one State to another. But that movement has not been under the sale, there having been no sale at the time of transportation." In Indian Coffee Board, Batlagundu v. The State of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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