1963 (5) TMI 55 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction to entertain the writ petition despite the existence of an alternative remedy.
2. Whether the petitioner is a "dealer" under section 2(f) of the Rajasthan Sales Tax Act.
3. Whether the sale took place in the course of import into the territory of India under Article 286(1)(b) of the Constitution.

Detailed Analysis:

1. Jurisdiction to Entertain the Writ Petition:
The court first addressed whether the writ petition should be dismissed due to the petitioner not availing the alternative remedy of an appeal under section 13(1) of the Rajasthan Sales Tax Act. Citing the Supreme Court's ruling in A. V. Venkateswaran v. Ramchand Sobhraj, the court noted that the existence of an alternative remedy does not bar the writ petition if there is a complete lack of jurisdiction or a violation of natural justice. The court found the petitioner's contention under Article 286(1)(b) sound and decided not to dismiss the writ petition in limine, thus overruling the respondents' contention.

2. Definition of "Dealer" under Section 2(f) of the Act:
The assessment order relied on the terms of the petitioner's appointment (exhibit 4) to classify the petitioner as a dealer. The petitioner argued that it acted merely as a del credere agent for the State Trading Corporation and should not be considered a dealer. The court examined the definition of "dealer" under section 2(f) and the Explanation, which includes agents of non-resident dealers. The court distinguished the present case from the Supreme Court case of State of Bombay v. Ratilal Vadilal and Bros., noting that the petitioner was involved in selling cement, maintaining accounts, and receiving payments. Thus, the court concluded that the petitioner must be deemed a dealer under section 2(f).

3. Sale in the Course of Import under Article 286(1)(b):
The petitioner contended that the sale of cement occurred in the course of import, exempting it from sales tax under Article 286(1)(b). The court reviewed the relevant Supreme Court cases, including State of Travancore-Cochin v. Bombay Co. Ltd., and J.V. Gokal and Co. (Private) Ltd. v. Assistant Collector of Sales Tax. The court found that the subsequent sales by the State Trading Corporation through its agent did not occasion the import of goods. However, the court noted that the property in the goods passed to the ultimate buyers in Rajasthan before the goods reached India, based on the terms of the agreement and the actions taken by the petitioner. The court concluded that the sales took place in the course of import and were exempt from sales tax under Article 286(1)(b).

Conclusion:
The court quashed the assessment order (exhibit 2) regarding the levy of sales tax on the transactions of cement imported from Pakistan by the State Trading Corporation. The respondents were directed not to collect any sales tax on such transactions. The writ petition was allowed with costs.

Petition allowed.