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TMI Blog1959 (5) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... red office at Baroda. The appellant was the owner of a textile mill and carried on business in manufacturing and selling textiles at Baroda. In the accounting years 1942 and 1943 tenders were invited by the Government of India for some of the articles manufactured by the appellant and the appellant submitted its tenders to the Government of India which accepted the tenders and placed orders for supply of goods manufactured by the appellant. These orders were accepted by the appellant at Baroda and the deliveries of the goods manufactured by the appellant and sold by it to the Government of India were pursuant to the said orders to be and were in fact effected f.o.b. Baroda. In fact so far as the manufacture and sale of the goods supplied to the Government of India were concerned, as also the deliveries thereof, everything took place at Baroda, outside the then British India. According to the conditions of the contracts governing the supplies made by the appellant to the Government, the system of payment was that, unless otherwise agreed upon between the parties, payment for delivery of the goods would be made on submission of the bills in the prescribed form in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Assistant Commissioner from the said orders of the Income-tax Officer, the Appellate Assistant Commissioner confirmed the orders of the Income-tax Officer and dismissed the appeals. From the said decision of the Appellate Assistant Commissioner the appellant appealed to the Income-tax Appellate Tribunal who, after two remand orders on various points in the case which have no relevance to the question involved in these appeals, finally by its order dated August 3, 1954, held that even though the appellant did not write to the Government saying that the cheques be sent by post, there was an implied request to the Government to send the cheques by post, observing that where a person in Baroda writes to another in Delhi to send the money due to him by a cheque there is an implied request to send the cheque by post. The appellant could not have intended that the cheques would be sent otherwise than by post and it was not the case of the appellant that the cheques received from the Government were delivered by hand on behalf of the Government to the appellant at Baroda and following the decision of this court in Commissioner of Income-tax v. Ogale Glass Works Ltd., the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant within the taxable territories. This contention was really of no avail to the Revenue because on the particular facts of the present case it was common ground that the payments made by cheques were accepted by the appellant unconditionally and in full satisfaction of its claims for goods supplied to the Government and therefore if the cheques be held to have been received by the appellant in Baroda the income, profits and gains were also received in Baroda which was outside the taxable territories. Even if the receipts of the cheques at Baroda be treated as a conditional payment of the appellant's claims for the goods supplied to the Government, the position was no better, for the simple reason that the cheques not having been dishonoured but having been duly cashed the payments related back to the dates of the receipts of the cheques and in law the dates of payments were the dates of the delivery of the cheques which was certainly in Baroda---outside the taxable territories. In either event, it could not be urged by the Revenue that the income, profits and gains were received by the appellant at any place other than Baroda (Vide Commissioner of Income-tax v. Ogale Glass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these words were construed to be an express request by the assessee to the Government to send the cheques by post. The various authorities which were discussed, viz., Thairlwall v. Great Northern Railway Co. ; Badische Anilinund Soda Fabrik v. Basle Chemical Works, Bindschedler ; Comber v. Leyland and Mitchell-Henry v. Norwich Union Life Insurance Society, were also cases where the expressions used were construed as words of express request constituting the post office the agent of the party receiving the money or the goods and went to support the case made by the Revenue that the post office was constituted the agent of the assessee for the purposes of receiving the cheques when they were posted by the Government in Delhi. Where, however, no such express words were used and the matter rested merely in the stipulation that the payment would be made by cheques, would the mere posting of the cheques in Delhi be enough to constitute the post office the agent of the appellant so that the income, profits and gains may be said to have been received by the appellant within the taxable territories ? If there was nothing more, the position in law is that the post office would not become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on wrote to a lady in Suffolk asking for a cheque. Did that letter reasonably lead the lady to suppose and did she suppose that she might send the cheque by post? She could not suppose that she was to send a messenger with it or come up to London herself. The only reasonable and proper meaning to be attached to it, whatever Madame Phillippe might have intended, was that she was to send the cheque by post. She, therefore, reasonably believed that she was invited to send her cheque by post, and she did what she was asked to do. Consequently what she did amounted to payment to the appellant. The Lords Justices concurred with this judgment. Resting itself upon the observations in this case this court observed in Commissioner of Income-tax v. Ogale Glass Works Ltd. at page 205 : " According to the course of business usage in general to which, as part of the surrounding circumstances, attention has to be paid, under the authorities cited above, the parties must have intended that the cheques should be sent by post which is the usual and normal agency for transmission of such articles and according to the Tribunal's findings they were in fact received by the assessee by post." Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the post was to be taken as the delivery of the cheque to the plaintiff, the only facts being that the defendants always sent cheques by post and that when the plaintiff received them he sent back the receipt duly signed. This case does not militate against the ratio of the decision in Norman v. Ricketts, but really confirms the same. If on the facts and circumstances of that case the Court of Appeal had been able to find any request, express or implied, to send the cheques by post the decision would certainly have been confirmed but in so far as there was nothing in the circumstances of the case from which such an inference could be raised the Court of Appeal observed : " It would be most monstrous to infer from those circumstances a request to send a cheque by post and that the plaintiff would consider that he had received it as soon as it was posted. " The other Lords Justices delivered judgment to the same effect and the appeal was allowed. The above ratio is really determinative of the question before us. The stipulation in the contract between the appellant and the Government was that the payment would be made by cheques. The Government of India was located in Delhi an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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