1953 (9) TMI 14 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner should be considered a dealer under the Sales Tax Act.
2. Whether the Sales Tax Commissioner's order holding the petitioner as a dealer is valid.
3. Whether the communication dated 9th May, 1952, can be quashed by a writ of certiorari.

Detailed Analysis:
1. The petitioner claimed to be a del credere agent of a company, acting as an intermediary between the seller and buyers, guaranteeing payment for goods sold. The Sales Tax Commissioner initially held that the petitioner was not a dealer but a broker, as it did not carry on the business of selling goods. The petitioner was described as a guarantee broker, facilitating transactions between buyers and sellers without taking possession of the goods. The court found that the petitioner was merely a broker and not a dealer under the Sales Tax Act, as the transactions were direct between the company and consumers, with the petitioner acting as a broker receiving remuneration for its services.

2. The Sales Tax Commissioner's order dated 9th May, 1952, which categorized the petitioner as a dealer, was challenged by the petitioner. The court determined that the order was a judicial order under Section 8A(5) of the Sales Tax Act. The court held that the order was erroneous as the petitioner was not carrying on the business of selling goods on behalf of the company and was not liable for registration as a dealer. The court directed the Sales Tax Commissioner to cancel the registration certificate of the petitioner, quashing the order dated 9th May, 1952.

3. The legal counsel for the respondents argued that the communication dated 9th May, 1952, was not an order and could not be quashed by a writ of certiorari. However, the court clarified that the decision dated 9th May, 1952, was indeed a judicial order under the Sales Tax Act. The court referred to a previous decision stating that determinations under Section 19 of the Sales Tax Act are binding and can be appealed. In this case, the court allowed the petition, quashed the order dated 9th May, 1952, and directed the Sales Tax Commissioner to cancel the petitioner's registration certificate, with costs to be borne by the parties accordingly.