TMI Blog1961 (4) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... ., (hereinafter called the 'Collieries') whereby monopoly was granted to the petitioner for arranging the sale of their coal in the specified area. The collieries could effect the sale of their product through the ' petitioner and none else. According to the Colliery Control Order, 1945, the Government of India imposed certain restrictions on the sale and distribution of coal. Inter alia it provided that no person other than the owner of a colliery shall sell, despatch or transport coal to a purchaser unless sanction was accorded by the prescribed authority of the Government of India. A colliery could charge only the price fixed under clause 4 of the Order and if a broker was employed by the colliery such brokerage was not to exceed as -/6/- per ton. Likewise, if a consumer purchased coal through a del credere agent he could also charge from the consumer certain specified commission. On 28th April, 1955, the petitioner for the first time entered into a contract with the Government of Rajaslhan for the supply of coal from collieries for consumption by the Jaipur Electric Power House. An agreement was executed between the petitioner and the Rajpramukh of Rajasthan (Ex. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding Turn over of goods exempted without fee.' The Sales Tax Officer on the basis of that return submitted on 20th December, 1956, for the assessment year 1955-56 passed an order wherein for computing tax the Sales Tax Officer also included a sum of ₹ 7,11,941-13-3, representing the sale price of the coal supplied by the petitioner to the State of Rajasthan and assessed tax to the tune of ₹ 27,845/11/6. The petitioner paid its tax on the retail sales effected by it as a registered dealer having realised the same from the consumers but it disputes its liability in respect of the coal supplies made by the collieries to the State of Rajaslhan and it submits that it is not liable to pay the demand of ₹ 20,346/14/9, which is the tax claimed on that supply since that was no sale at the hand of the petitioner in that respect. The petitioner approached the Government of Rajasthan, either to pay the tax demanded by the Sales Tax Officer or to pass an order exempting the supply of coal by the collieries from sales tax. Several representations were made to the Chief Engineer, Electrical and Mechanical Department, and to other authorities but without any beneficial res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han; and it was on the basis of this consolidated statement that the Sales Tax Officer proceeded to assess the petitioner. A copy of the consolidated statement had been submitted with the reply. The petitioner, assuming that it had a grievance, according to the respondents, ought to have filed an appropriate appeal tinder the Sales Tax Act rather than invoked the extraordinary jurisdiction of this Court. It is disputed that the sale of coal was outside the State of Rajasthan and, therefore, it is submitted that Article 226 does not appty to the case. The petitioner had an alternative remedy by way of an appeal and the petitioner having allowed that remedy to lapse by efflux of time the present petition must fail. It is submitted that the petitioner is also guilty of laches and its petition should be dismissed. 6. In its rejoinder the petitioner has endsavoured to explain the circumstances regarding the consolidated statement (Ex. A/1). It is alleged that the petitioner's manager of Jaipur office put his initial on a typed paper for purposes of keeping a record of his presence before the assessing authority. The petitioner further says that there had been some oral assurances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled upon to exercise judicial or quasi judicial functions and not to relegate the petitioner to other legal remedies available to him. If it is held that the Sales Tax Act itself does not authorise any such imposition and the law is not applicable to the circumstances of the case the provision of a remedy by way of appeal under the Act cannot stand as a plea in bar. 9. The learned Government Advocate invited our attention to two cases of this Court Ram Niranjan Kedia v. I. T. Officer, 'A' Ward, Udaipur, AIR 1957 Raj 210 and Jethma: Ramswaroop v. State, 1959-10 STC 270 ; (AIR 1958 Raj 262). In Kedia's case notice under section 34(1) of the Indian Income Tax Act was issued. An appeal was preferred against the order in question but because the appellate authorities felt wholly powerless to stay the realisation of the de mand made by the Income-tax Officer the assessee in that case sought relief under Article 226 of the Constitution. Wanchoo C. J., dismissing the petition observed that the Income-tax Act wss a self-contained statute and no inter ference was called for under Article 226 of the Constitution. In Jethmal's case the question whether sa' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund the aforesaid amount paid by till assessee. The High Court held that the State was bound to refund the monies unlawfully received by it Iran the assessee by way of sales tax. The State preferred an appeal before the Supreme Court and it was held that Section 72 of the Indian Conjtract Act makes no distinction between a mistake of law ana a mistake of fact. The term has been used without any qualification or limitation whatever, and comprises within Its scope a mistake of law as well as a mistake of tact. The true principle enunciated is that if one party under a mistake, whether of fact or law, pays to another party money which is not due by contract or otherwise that money must be repaid. The mistake lies in thinking that the money paid was due when in fact it was not due and that mistake, if established, entitled the party paying the money to recover it back from the party receiving the same it was also held that, No question of estoppel can ever arise where both the parties, as in the present case, are labouring under the mistake of law and one party is not more to blame than the other. Estoppel arises only when the plaintiff by his acts or conduct makes a represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rolled rate. In point of practice as well the Railway Receipts, a sample copy of which is Ex. P/2, the consignor was Rampur Colliery and the consignee was described as the Executive Engineer (Generation) Electrical and Mechanical Department. The procedure of supply according to the Control Order was as stated in paragraph 9 of the petition. In actual practice the Deputy Coal Commissioner (Distribution) Calcutta, used to sanction an allotment of coal in favour of the Chief Engineer, Electrical and Mechanical Department, Rajasthan, Jaipur, as would be apparent from Ex. P/4, a sample allotment order. The petitioner was, therefore, a mere broker or del credere agent and not a seller. The sale took place outside the State. In spite of the socalled admission by the petitioner's Manager in giving the consolidated statement of sales for the assessment year 1955-56, it was the bounden duty of the Sales Tax Officer to take notice of the Control Order and the agreement between the parties under which there could be no tax liability against the petitioner and the assessment order as also the order imposing penalty deserved to be quashed. 13. The learned Government Advocate submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sell direct to consumers and an allotment is made by the Deputy Coal Commissioner (Distribution) to a consumer with his consent for such direct sale, the coal shall be delivered to the consumer at 'the price fixed under Clause 4, and no commission or other charges shall be paid in addition thereto, except where a broker is employed, a brokerage not exceeding six annas per ton may be paid by the colliery owner to the broker. Where the coal is purchased through a del credere agent then what he is entitled to receive is also specified in Clause 6 of the Control Order. Under Clause 12E no person shall acquire or purchase or agree to acquire or purchase any coal from a colliery and no colliery owner or his agent shall despatch or agree to despatch or transport any coal from the colliery except under the authority and in accordance with the conditions contained in the general and special authority of the Central Government. 15. In the case before us we find that by a letter dated 2nd September, 1948, the colliery granted the petitioner a monopoly for the sale of the coal produced by the collieries in the various areas mentioned in that letter (Ex. P1). Rajputana, as Rajasthan was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lection of the price. Respondents' contention in their reply that they had nothing to do with the collieries does not appear to be correct. In this state of facts we have to ascertain whether the petitjener ever came to acquire any right or title in the coal received by the State of Rajasthan. We have it on record that the Deputy Coal Commissioner (Distribution) sanctioned the allotment of coal to the State Engineer. In the absence of any such sanction the collieries could not supply the coal to the petitioner nor could the petitioner purchase the coal from tne collieries. The sanction was necessary before the collieries could, under the Control Order, sell or despatch any ceal. Thereafter the collieries despatched by rail the coal, so sanctioned directly to the State Power House through its Engineer. The consignee of the railway receipt was the Engineer and not the petitioner. Thus at no stage title in goods despatched by the collieries passed or could pass to the petitioner. In view of the Control Order the collieries could not sell or despatch coal to a party other than the one in whose favour the sanction was accorded by the Central Government. No sanction in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The colliery supplied the coal to the brick manufacturer directly. The consignment was in the name of the brick manufacturer. The bill was sent by the colliery to Ratiial Vadilal and Bros., to collect the price of the coal supplied together with their commission. The liability to pay the colliery rested upon Ratilal Vadilal and Bros. The question arose whether in the circumstances Ratilal Vadilal and Bros., was or was not a dealer within the meaning of the Bombay Sales Tax Act, 1953. The Supreme Court held:-- The scheme of the Control Order shows that no sale of coal could take place except to a person holding a certificate. A sale otherwise was in contravention of the Control Order. The certificate which has been produced in the case, though made out in the name of the respondents, shows the consumer as the consignee. It is thus plain that there was no sale by the colliery to the respondents, but directly to Karsandas, though through the agency of the respondents. The respondents also, when they made out the bill to Karsandas, mentioned that he was the consignee, and that they were only charging their 'middlemen' commission, in these circumstances, it is difficult to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' in the Bihar Sales Tax Act again came to be considered and Das, C. J., and Kanhaiya Singh, J., held that the word 'supply in the definition of dealer in section 2 (c] of the Bihar Sales Tax Act was not to be given its literal meaning but must be interpreted in a qualified sense. 'Supply' is merely a form of sale and despatch, and unless there was sale there was no supply of goods. In this case as Well the petitioner did not deal in coal but merely acted as a middleman and arranged for the despatch of coal from the collieries to the intending buyers. The sales tax authorities held that the assessee being a registered dealer and the registration being in operation it was liable to pay tax on its sale of coal. The High Court held that merely because an assessee is a registered dealer it will be erronous to say that even the transactions carried on by it as a middle-man will be included in its taxable turnover. 19. We are in respectful agreement with the above principles and are of the view that the word 'supply' in the definition of the term 'dealer' has a limited meaning which partakes elements of sale. There is an additional reason in our opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place between the assessees and the third parties was again a transfer of property in the goods and constituted sale. In the case before us there was no sale at any point of time by the collieries to the petitioner. The certificate of allotment was granted to the Executive Engineer, Rajastnan, Jaipur, the engineer was designated as the consignee in the railway receipt, the petitioner merely passed on that railway receipt to the Enginaer for the purchases (sic) of taking delivery from the railway and added nothing by way of profit. Therefore the case before us contains no element of sale between the collieries and the petitioner. 22. The facts of the sacond case from Nagpur were that the assessee was assessed to sales tax on the sale of logs to a company at Ambernath in the State of Bombay. The contract of sale between the assessee and the Company inter alia provided that the logs on arrival at Ambernath were liable to be rejected by the company's factory manager if the logs did not conform to the specifications, notwithstanding the fact that such logs might have been accepted by the company's representative before being railed to Ambernath. The assessee railed the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is, as it were, agent both for the one and the other, to negotiate the commerce or affair in which he concerns himself. Thus his engagement is twofold, and consists in being faithful to all the parties, in the execution of what each one of them entrusts him with, and his power is not a trust, but to explain the intentions of both parties, and to negotiate in such a manner as to put those who employ him in a condition to treat together personally. 23. In this view of the matter we are of the opinion that the petitioner acted merely as a broker, a middleman who affected no sale or supply in the nature of sale or transferred any title in the property. In fact at no point of time he had any title to pass. The price paid by the State to the collieries could not be included in the taxable turnover of the petitioner. The order of the Sales Tax Officer, dated 20th December, 1956, is, therefore, not authorised by law to the extent it relates to the price paid by the State of Rajasthan to the collieries for supply of coal. To that extent only the order dated 20th December, 1956, is quashed. As a logical corollary the order imposing penalty for the non-payment of tax on this part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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