TMI Blog1977 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover represented local sales coming under that head, on behalf of the assessee it was contended that those sales were in the course of import and that if that contention is not accepted, it is clear from the facts that there were really no sales by the assessee to its members. We shall consider these aspects. Before doing so, we have to refer to certain facts and certain agreements. The Madras Motor Parts Dealers' Association is an association of its constituents who are all dealers in motor parts. The members wanted to import certain parts which were in demand and which were importable pursuant to agreements entered into between India and other countries on making payments in rupees. They, therefore, approached the association and paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n authorising the State Trading Corporation to permit the association to import. It was made very clear that the permission was to be granted to the association to import on their behalf, i.e., on behalf of the State Trading Corporation. The letter of authority also stated that it shall be subject to the conditions stated in the letter of authority itself. Those conditions are the following: "1. The person or concern in whose favour it has been issued will act purely as an agent of the licensee and the goods imported will be the property of the license-holder both at the time of clearance through the customs and subsequent thereto. The license-holder will have to ensure that the goods on importation will be delivered to him and shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and the association. A copy of this was also made available to us and this agreement as well as the agreement between the association and its members, the letter of authority and even the licence granted to the State Trading Corporation were parts of the records in the case on the basis of which the question had to be decided. The agreement between the State Trading Corporation and the association is a long one and it is generally in consonance with the letter of authority and the conditions attached to it though it contains many other details regarding the obligations of the State Trading Corporation and the association. It is unnecessary to refer to these details, but we would like to emphasise that one of the obligations imposed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the licence as well as in the agreement between the association and the State Trading Corporation that the goods will remain the goods of the State Trading Corporation at the time of the import, at the time of the clearance and even after the goods were cleared by the association. It is, therefore, evident from the facts of this case that the import sale was in favour of the State Trading Corporation, the association acting as the agent of the State Trading Corporation. This position cannot be adversely affected by paragraph 11 of the agreement between the State Trading Corporation and the association, for, by virtue of statutory provisions, the import can only be by the State Trading Corporation and the terms of the letter of authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re can be little doubt that-it was so urged, going by the terms of this agreement-at no time was it in the contemplation of the parties, namely, the association and its members, that there should be any agreement for sale between them or that the goods imported must be sold to its members. It was intended only that the association should act in the matter of procuring the goods required by the members for the purpose of their business of dealing in and in selling motor parts. Though no doubt counsel for the revenue is right in contending that any agreement between the association and its members cannot override the effects of the provisions of law, in order to enable the association to contend that there were no sales, if in fact there were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in accordance with the terms of the agreement between the association and the State Trading Corporation that the sales were only to actual users and, if insisted by the State Trading Corporation, only to actual users pointed out by the State Trading Corporation. Such sales and the turnover relating to them are not before us. We expect that those sales would have been taxed at the hands of the members of the association. The ruling in Serajuddin's case[1975] 36 S.T.C. 136 (S.C.). has dealt with a different set of circumstances. There, it was possible for the court not only to postulate that there were two sales but also to come to the conclusion that those two sales were not so linked as to form an integral part of one sale transaction s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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