TMI Blog1980 (9) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... said Inspector and whether the Tribunal was justified in assessing tax on those shortages noticed? (2) Whether, on the facts and in the circumstances of the case, the Member, Additional Sales Tax Tribunal, is correct in law in bringing the tax liability of the assessee for the purchase of paddy and sale of rice which were admittedly transacted on account of the principal, F.C.I., as their agent and the agent's failure to account to the principal?" S.J.C. No. 174 of 1976 is a reference made by the Tribunal pursuant to an order of this Court on the assessee's application under section 24(2)(b) of the Act and the following question has been referred: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice and paddy beyond the terms of agreement entered into by them. The Food Corporation of India who is the principal in relation to the dealer for the purpose of purchasing and milling of paddy has not certainly authorised the dealer to appropriate the stock of paddy and rice in the manner other than stipulated in the terms of agreement. Therefore, the Food Corporation of India moved the District Magistrate, Balasore, to take action against the dealer for having abused the terms of appointment of agency by him. Hence for the unauthorised action committed by the agent beyond the terms of agreement the principal cannot certainly be made answerable for huge discrepancy noticed in the stock kept at the custody of the dealer. The dealer even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ages 22 and 23 of the assessment record. The allegation is thus based on mere presumption of facts without any independent enquiry or independent proof. Without such independent proof the best judgment assessment cannot be sustained. Mere shortages also will not make a dealer liable to tax on purchases or sales as decided by the Honourable High Court in the case-law cited by the appellant. As rightly argued by the learned Advocate, the appellant has been paid for the packing of the rice delivered to the F.C.I. at specified rates on every quintal of rice and not for every gunny bag supplied. The payment is thus clearly for the packing of the goods delivered to the F.C.I. under the terms of the agreement. Therefore, the appellant cannot be he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an agreement under which the agent is entitled to charge a price for the gunny bag and that has been taken on quintal basis. There is a clear finding that the assessee had as a fact charged at the rate of Rs. 3.25 for gunny bag. The Assistant Commissioner went wrong in holding that it was labour charges for packing. 7.. Our answer, therefore, is: On the facts and in the circumstances of the case, the Member, Additional Sales Tax Tribunal, was not justified in vacating the appellate order of the Assistant Commissioner merely on the basis of the report of the Inspector of the Food Corporation of India. This answer would cover both the questions referred by the Additional Sales Tax Tribunal. So far as the other question is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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