TMI Blog1988 (3) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... Viswanatha Rupa Company had pleaded that a sale made by them was only a second sale, they having purchased the scrap material from him, which was the first sale and hence Viswanatha Rupa Company is not liable to be assessed to sales tax in respect of the sale of the same materials. 3.. It is stated by the petitioner that the entire assessment has been made on a misconception of facts and for a true and proper appraisal of the question in dispute, it is necessary to delve a little into the background of the entire proceedings. In 1967, the petitioner approached certain financiers in Madras to finance the purchase of a wrecked ship grounded on the Madras Coast opposite the Marina Beach. It belonged to a foreign company and the owners of the ship M/s. Diana Maritime Corporation represented by their authorised agents M/s. South India Shipping Corporation Private Limited, were agreeable to sell the grounded ship "ss. Stamatis" as scrap to him for the sum of Rs. 7,00,000. Later by negotiation with the owners of the grounded ship, it was reduced to Rs. 3,30,000 and the petitioner had also deposited a sum of Rs. 50,000 with the agents of the owners of the ship for the purpose. 4.. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntimate to that effect within three weeks of the order of the court. On the failure of either of the contingencies, Viswanatha Rupa Company shall have the right to remove and deal with these items in the same manner as other articles. Since there has been failure on his part in regard to the aforesaid conditions, M/s. Viswanatha Rupa had exercised the right reserved in them under clause 11 of the said agreement. The assessing authority has treated the exercise of that right by Viswanatha Rupa Company as a sale by him in respect of that portion of the materials, which he has removed and sold elsewhere. If Viswanatha Rupa has treated that transaction as a first sale and entered so in his books of account thereby acquiring the status of a second sale to avoid his liability for assessment to sales tax as a first sale, the petitioner cannot be held responsible for the erroneous or dubious entries made by M/s. Viswanatha Rupa Company in their accounts. He shall not be mulcted with a levy for no fault on his part. 6.. As stated already, that transaction came to light while the Sales Tax Appellate Tribunal was disposing of an appeal preferred by M/s. Viswanatha Rupa Company. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that the Sales Tax Appellate Tribunal, while disposing of the appeal in its T.A. No. 208/72 dated 25th September, 1979, pertaining to M/s. Viswanatha Rupa Company, Marina Beach, Madras, had observed that Viswanatha Rupa Company had purchased iron scrap to a tune of Rs. 4,02,547.59 from the petitioner M.J. Durairaj, 111, Santhome High Road, Madras-28, and they become the second dealer and the sale turnover of Rs. 4,02,547.59 effected by the petitioner has to be assessed as first dealer. The petitioner has not come forward with evidence that he had no such transaction in the company mentioned. Hence the assessing authority made the revision in the face of the records and materials available under section 55 read with section 16(2) of the Act on 28th March, 1974. The petitioner was given ample opportunity to prove that he has no transactions with the company mentioned during the year of assessment for 1968-69 on a turnover of Rs. 4,02,547.59 being the sale of iron scraps to the said company. In brief he has not proved: (i) that he has no transactions with M/s. Viswanatha Rupa Company, Madras-1, during the assessment year 1968-69; (ii) that he is not the first s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se details. The nature of the article whether it is scrap or not can be easily ascertained with reference to the entries in these schedules. The agreement cited indicates a transfer of property by way of sale from Durairaj, as per supervision of the Commissioners to the appellant, i.e., Viswanatha Rupa Company. The Commissioner filed before the court a statement showing the goods delivered by him with reference to the above agreement. This list also refers the items in the above schedule. The goods were also purported to have been delivered to Viswanatha Rupa Company. Thus, it is found that the petitioner had effected sales of the items involved through the appointment of the Commissioners for supervision to Viswanatha Rupa Company by way of transfer of property involving sale." 12.. It is also stated in paragraph 5 as follows: "This Honourable Court disposed of applications, 2778/71, 2779/71, 2780/71, 2803/71, 566/72, 567/72 in C.S. No. 135 of 1967 dated 19th April, 1972. The following extract of the order will make abundantly clear that the transaction is only sale. The petitioner herein is the applicant in the above applications and first respondent in the suit. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited by the respondent. The value of the metal to be carried away by the respondent was to be ascertained by calculating the weight and the rate fixed in the agreement. The abovesaid sum of Rs. 5,57,000 deposited by the respondent was to be the minimum guarantee, that is to say, if the various components which the respondent could remove as per the terms of the agreement did not come up to the total value of Rs. 5,57,000 as per the rate fixed in the agreement, the respondent would have no claim whatsoever against the applicant. If however to various parts removed by the respondent on dismantling the ship exceed the sum of Rs. 5,57,000 in value as per the abovesaid rate, then the respondent can remove further parts only after paying for the excess. Till the total value of the component parts reach the sum of Rs. 5,57,000 the respondent had no obligation to pay anything more. Admittedly, in pursuance of the abovesaid arrangement, the respondent engaged its men, dismantled the ship and had been carrying away the metal. This Court appointed Mr. Balagopal, an Advocate, as Commissioner to supervise the work of weighing the component parts dismantled and removed by the respondent in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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