1964 (9) TMI 45 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the appellants are liable to pay sales tax on a sum of Rs. 1,85,348-02 representing turnover of transactions acting as buying agents.
2. Whether the Board of Revenue had the power to exercise revision powers when a revision petition was pending before the Deputy Commissioner of Commercial Taxes.
3. Whether the transactions in question were buying agency transactions or purchases made for the appellants' own benefit.

Analysis:
1. The appellants contended that the disputed sum represented turnover from buying agency transactions, thus exempt from sales tax. The Commercial Tax Officer initially allowed exemption for a portion but rejected the claim for selling agency transactions. The Board of Revenue later upheld selling agency transactions but denied exemption for buying agency transactions. The High Court analyzed the correspondence and documents related to the transactions and concluded that the appellants acted solely as buying agents, not purchasing goods for themselves. The Court found the Board of Revenue's perspective erroneous in interpreting the sequence of orders and confirmations and ruled in favor of the appellants, granting exemption for the buying agency transactions.

2. The appellants raised an objection regarding the Board of Revenue's exercise of revision powers while a revision petition was pending before the Deputy Commissioner of Commercial Taxes. The Court, however, deemed it unnecessary to address this objection as they upheld the appellants' claim on the merits.

3. The Court scrutinized the transactions divided into three categories by the Board of Revenue. For each category, the Court examined the correspondence and documents to ascertain the nature of the transactions. It was established that the appellants consistently acted as buying agents, even in cases where interest was debited or goods were clubbed together for multiple purchasers. The Court dismissed irrelevant considerations raised by the Board of Revenue, such as the inability to apportion goods in a single consignment to different purchasers. The Court emphasized that the appellants' role as buying agents was evident from the correspondence, regardless of discrepancies in declaration forms. Ultimately, the Court reversed the Board of Revenue's decision, granting exemption for the buying agency transactions based on the evidence presented.

In conclusion, the High Court allowed the petition, holding that the appellants were entitled to exemption for the transactions in question, which were proven to be buying agency transactions.