TMI Blog1973 (8) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... e-1, a document dated 1st February, 1965, the petitioner-company appointed Messrs. International Stores as its distributing agent at Sambalpur. The relevant terms of agreement were as follows: (1) The godown at Sambalpur belongs to the agent but the goods despatched to the agent and stored in the said godown would continue to be the property of the petitioner-company and would be disposed of only in accordance with the instructions of the company's representative. (2) For the services rendered by the agent, he would be entitled to a commission of one and half per cent on the total value of the goods sold. He would also be remunerated at one per cent on account of clearance and delivery expenses. The Sales Tax Officer issued notice in August, 1970, in form VI and required returns to be filed for assessment under the Act. The petitioner took the stand in its reply dated 10th September, 1970, to the assessing officer: "...........We submit that we do not carry on the business of purchasing or selling goods in the State of Orissa and as such we are not a 'dealer' under the sales tax law of your State. We submit that the notice issued by you is without jurisdiction and we contes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... International Stores with the sole distributorship of such product initially transfers the goods with their value to his shop account and commission is immediately charged against such transfer. Further the transfer of stock and such nature with its value find place in the column '(sales)' as per the stock account pertaining to the stocks of M/s. Nestle's Products maintained by M/s. International Stores........." In paragraphs (10), (11) and (12) of the counter-affidavit, the following has been pleaded: "(10).........From the statement of Sri Jamunadas Chandak it was found by opposite party No. 2 that he is the sole distributor of the petitioner. As the sole distributor, the goods of the petitioner came to him. He effects sales of the goods which may be divided into two categories. One category is that sales are effected to third parties. The other category is that Sri Chandak transfers the goods to his own account for retail sale by him. (11) That it was further found out that Sri Chandak has paid the tax in respect of the goods sold on account of the petitioner to third parties by acknowledging his own liability to pay the tax and by incorporating the same to his return. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of goods sold, as commission for your services.........." The fact found is that in the accounts maintained by the agent, transfer of title from the company to the agent is recorded whereupon only commission has been claimed. 5.. Two questions have been ultimately raised by Mr. Mohanty for the petitioner: (1) The assessee cannot be treated as a dealer in view of the fact that it is non-resident and it has an agent within the State of Orissa; and (2) Transfer of the stock by the agent to himself does not constitute a sale. We shall examine these two points now. 6.. Point No. 1: "Dealer" has been defined in section 2(c) of the Act to mean: ".........any person who carries on the business of purchasing or selling or supplying goods in Orissa, whether for commission, remuneration or otherwise, and includes a department of Government which carries on such business and any firm or Hindu joint family, and any society, club or association which purchases goods from, or sells or supplies goods to, its members and also includes a casual dealer as hereinbefore defined. Explanation.-The manager or agent of a dealer who resides outside Orissa and who carries on the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Orissa and, therefore, attracts the liability of a dealer. In the case of Public Prosecutor v. K. Sankunny and Others[1954] 5 S.T.C. 5., the Madras High Court considering the definition of the word "dealer" expressed almost in similar terms, came to hold that a person who is not a resident of a State cannot escape from or evade the imposition of tax by the particular State if the necessary requirements are fulfilled which justify the levy of a tax. The case of Bombay Cycle Stores Co. v. The State of Bombay[1956] 7 S.T.C. 260. is a clear authority for the proposition that the petitioner would have liability as a dealer. The decision of the Sales Tax Tribunal in the said case is reported in [1956] 7 Sales Tax Cases 260, where it was held that a person, whether he is a resident or non-resident, is a dealer within the meaning of the Bombay Sales Tax Act, 1946, if he carries on the business of selling goods within the State of Bombay. The explanation to the definition of dealer in section 2(c) of the Act makes the agent (if any) also a 'dealer' and it is not intended to take the principal outside the scope of liability. This decision was affirmed by the Bombay High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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