TMI Blog2018 (3) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... rference with the impugned assessment orders and accordingly, the writ petitions fails - decided against petitioner. - W.P.Nos.32077 and 32078 of 2004, W.P.M.P.Nos.38851 and 38852 of 2004 - - - Dated:- 13-3-2018 - T. S. Sivagnanam, J. For the Petitioner : Mr.N.Sriprakash for Mr.Adithya Reddy For the Respondent : Mr.M.Hariharan, Additional Government Pleader ORDER Since the issue involved in both the writ petitions, is one and the same, they are taken up for hearing together and disposed of by this common order. 2.The petitioner is a trader in plastic raw materials and registered as a dealer on the file of the respondent under the provisions of the Tamil Nadu General Sales Tax Act, 1959 [TNGST Act] and the Central Sales Act, 1956 [CST Act]. 3.The petitioner has challenged the assessment orders passed by the respondent under the provisions of TNGST Act for the assessment years 2000-2001 and 2001-2002. Though, the petitioner has an alternative remedy as against the impugned assessment orders by preferring an appeal, the petitioner has not availed the same and filed the writ petitions on the ground that the impugned orders are patently erroneous and bad in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, it was stated that the person, thought had taken the registration had disappeared, not transacted any goods, not effected any sale of goods and not accounted for the interstate purchases. It was further stated that every commission agent/broker/del credere agent/auctioner or other mercantile agent are required to observe the conditions stipulated under the rules and the petitioner has not complied with the conditions. Further, by referring to the agreement entered into between the petitioner and M/s.Haldia Petro Chemicals Limited, it was stated that it contemplates that the agent is responsible for the maintenance of records and payment of sales tax and other statutory levies in the event of default by the customers/buyers. Further, the petitioner has arranged direct supply of goods and invoices raised by Haldia Petrochemicals Limited, West Bengal, for the dealers who are found to be defrauding the exchequer by not reporting the taxable turnover, no business actually done and the proprietor was found to be not available. (iv)The petitioner in their objections, dated 20.04.2004, stated that they are only a canvassing agent of M/s.Haldia Petrochemicals Limited and they pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llachi and the same is an inconsistent statement as found in the impugned orders. Therefore, it is submitted that the show cause notices are absolutely vague with bundle of inconsistence and contradictory statements and therefore, the show cause notices are liable to be rejected. 8.Further, it is submitted that the show cause notices were issued with the closed mind and preconceived notion and such show cause notices have to be held as bad in law and no action can be taken pursuant to such show cause notices. In support of such contention, reliance was placed on the decision of the Hon'ble Supreme Court in Oryx Fisheries Private Limited v. Union of India and others reported in (2010)13 Supreme Court Cases 427. 9.Placing reliance on the decision of the Hon'ble Supreme Court in Joseph Vilangandan v. The Executive Engineer, (PWD), Ernakulam and Others reported in (1978)3 Supreme Court Cases 36, it is submitted that when the show cause notices are not clear, no adverse orders could be passed against the dealer, based upon such unclear and vague show cause notices. Further, it is submitted that though the goods might have moved from West Bengal to Chennai and then proceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the material placed on record. 13.The factual position which emerges from the material papers are that the petitioner was both consignment agent and del credere agent of Mr.Haldia Petrochemicals Limited and an agreement to the said effect was entered into on 01.07.2002. Having accepted that the petitioner is a del credere agent, they are bound to comply with the instructions as per Section 40(1) of the TNGST Act read with Rule 26(6)(a) of the Rules. Admittedly, the petitioner has not complied with or observed any of the conditions as contemplated under the Rule. M/s.Nandhini Polymers, who was a registered dealer on the file of the Commercial Tax Officer, Pollachi (Rural), did not account for the purchases nor paid taxes. On enquiry, it was found that M/s.Nandhini Polymers, was a non-existing dealer and no business activities were carried on, in the premises, which they had furnished as the registered office and ultimately the Registration Certificate granted to M/s.Nandhini Polymers was cancelled on 01.04.2002. As a del credere agent, the petitioner has to sign the indent order acceptance and send the same to M/s.Haldia Petrochemicals Limited, who has to raise delivery challan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of HPL based on the assessment of the estimated volume of the business. 5.REALISATION: A. The Del Credere Agent guarantees and undertakes that the buyers of the said Product will fulfill its obligations to HPL in respect of the sales effected or the said Product delivered to the customers/buyers. The Del Credere Agent further guarantees the payment of the said price due and payable for the said Product and in the event of the default by the buyers or the customers in paying the prices within the due date. The Del Credere Agent undertakes to pay the same and/or HPL shall have the right to realize the price for the said Product from the cash deposit/encash the Bank Guarantee. 13.RULES AND REGULATIONS: The Del Credere Agent will comply with the requirements of all the statutes, laws and regulations for the sale of the said product to the customers and shall exclusively be liable for the collection and payment of sale proceeds of said Product including all taxes, dues and levies (whether sales tax, central excise or octroi, etc.) in respect of the sale of the said Product effected by HPL to the customers. The Del Credere Agent shall at all times indemnify and keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly order. Therefore, the respondent was right in holding that the petitioner received the goods in the name of a non-existing buyer and disposed of it as his own goods. Further, as pointed out earlier, if the transaction done by the petitioner was as a del credere agent, they ought to have maintained and furnished particulars and records as per Rule 26(6)(a) and (b) of the TNGST Rules, 1959 and claimed exemption thereon. Further, they had admitted before the Assessing Officer that they had handled the goods. Thus, the Court is fully satisfied with the finding recorded by the Assessing Officer that the petitioner was liable for payment of the tax is fully justified and it is clear that the transaction on hand is one of outright suppression of sales. Though, under Clause 2(B) of del credere agreement, dated 01.07.2002, states that the customer shall fill in and sign the indent/order acceptance and submit to HPA directly or through the del credere agent, the petitioner buyer's code has been mentioned, which is sufficient to hold that the petitioner remained as the owner of the goods. Furthermore, in terms of Clause 13, the del credere agent was required to comply with the requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods in between before it is delivered to the dealer does not take away the character of the transaction as an interstate sale. In the said case, the assessee was a manufacturer of face powder at Madras and had branches at Bombay and other places. The Canteen Stores Department, Bomay, placed orders at their Bombay branch, which was forwarded to the Madras office, who in turn, consigned the goods to their Bomay Branch warehouses, from there, it was supplied to the Canteen Stores Department, immediately after raising invoices in terms of orders already placed. I find that the said decision can render no assistance to the case of the petitioner. 21.The decision in Parikh Metal Corporation v. The Commercial Tax Officer, Peddunaickenpet South Circle, Chennai 600 001 [W.P.Nos.19262 to 19246 of 2000], relied upon by the Revenue, could be applied to the facts of the instant case. It was held that the mere fact that the word agent or agency is used or the words buyer and seller are used to describe the status of the parties concerned, is not sufficient to lead to the irresistible inference that the parties did in fact intend that the said status would be conferred. What is required to ..... 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