9911796707
TMI Blog1976 (2) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ustic soda and liquid chlorine worth Rs. 10,96,577.16 to M/s. Titagarh Paper Mills Ltd., Chowdwar. The Assessee did not pay sales tax according to Orissa Sales Tax Act on the aforesaid amounts and excluded the same from the taxable turnover. It pleaded that M/s. Titagarh Paper Mills Ltd., Chowdwar inside Orissa had purchased caustic soda and liquid chlorine from M/s Andhra Sugar Ltd., Tanuka in Andhra Pradesh, Chandranagar Supply Agency, Calcutta in West Bengal, Sourashtra Chemicals Porbandar in Gujarat and Pokharamal Gurudayal, Ramkirshnapur, Calcutta in West Bengal, in pursuance of prior contract for sale of goods. In the above transactions the assessee had acted only as commission agent. So the transactions covering turnover of Rs. 5,86,207.29 during the year 1968-69 and Rs. 10,96,577.16 during the year 1969-70 were in course of inter-State trade and commerce within the meaning of s. 3 of the Central Sales Tax Act. In such circumstances the assessee claimed exemption under proviso to s. 6(2)(B) of the aforesaid Act. 3. The assessing officer examined the documents produced by the assessee before him and came to conclude that the transactions in question were not in course of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the revenue that sales were intra-State and not inter state. Therefore the first appellate authority went wrong in finding that the sales were in course of inter-state trade and commerce. According to him the assessing officer was correct in assessing the assessee according to Orissa Sales Tax Act. The learned counsel appearing for the assessee on the other hand urged that the transactions were inter-State in character and the assessee had acted as a middle man earning commission. Therefore, according to him the decision of the first appellate authority was correct. 6. In view of the above contentions the only point for consideration in these appeals is whether the transactions were intra-state or inter-State. 7. In order to prove that the transactions were inter-State in character and attract provisions of s. 3 of the Central Sales Tax Act true copies of several documents which were mainly correspondences were relied upon by the assessee. The revenue has also relied upon the same documents to prove that the transaction were intra- State. It is therefore necessary to closely scrutinise the documents on record to find out the true nature of the transactions. If it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Andhra Sugar Ltd., to the third party namely M/s. Titagarh Paper Mills Ltd., Chowdwar, there is no evidence of any kind to show that actually the representative of the assessee took delivery of the goods at Chowdwar or at any of the place and then gave delivery of the same to M/s. Titagarh Paper Mills Ltd. (iii) in the letter dated 26th Aug, 1968 M/s Andhra Sugar Ltd., intimated to the assessee for supply of liquid chlorine. It was specifically mentioned that the unloading and the loading at the end of the assessee will be arranged by the latter at its own cost within a reasonable time. (iv) on 4th Oct 1969 Sourashtra Chemicals wrote letter of acceptance to the assessee for sale of Soda Ash Light and Caustic Soda solid at different rates according to the terms and conditions of sale attached to the letter. It is pertinent to note that in the letter and the terms and conditions of sales, the assessee has been described as purchaser of the goods. There was no contract that the goods would be delivered to M/s. Titagarh Paper Mills Ltd., Chowdwar. There is no evidence of any kind to show that the assessee first took delivery of goods and then effected delivery to M/s. Titagarh P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent paid by the assessee on account of M/s. Titagarh Paper Mills will be reimbursed. 12. As referred to earlier the goods were despatched by truck and way bills accompanied the goods. One such way bill is dated 30th Nov 68. It will appear from it that the consignor and the consignee of the goods as noted therein were Andhra Sugar Ltd., and the assessee respectively. The way bill was endorsed in favour of M/s. Titagarh Paper Mills Ltd., by the assessee. 13. From consideration of the aforesaid documents the following facts emerge. M/s. Titagarh Paper Mills Ltd., Chowdwar was in need of caustic soda and liquid chlorine for the purpose of manufacture of paper and allied products. It arrived at an agreement with the assessee for supply of the above goods at Mill site on payment of net price and commission. In order to supply the goods to M/s. Titagarh Paper Mills Ltd., the assessee entered into contracts with the selling dealers of Andhra Pradesh, West Bengal and Gujarat, in pursuance of which, it purchased goods which were delivered to M/s. Titagarh Paper Mills Ltd., Chowdwar. Payment between the assessee and M/s. Titagarh Paper Mills Ltd., Chowdwar were agreed to be mutually ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Sales Tax Act having been satisfied, I have no estimation to hold that the sale of caustic soda and liquid chlorine by the selling dealers of Andhra Pradesh. West Bengal and Gujarat to M/s. Titagarh Paper Mills Ltd., were in course of inter-State trade and commerce. (See the decision in case of State of Orissa vs. M/s. S. Lal Co. (P) Ltd.(2) 17. Reference has already been made to the documents showing the terms of contract between the assessee and M/s. Titagarh Paper Mills Ltd., Chowdwar by which the former was to get a commission over the net price of the goods. The principles about commission agency has been discussed in para 9 of the decision reported in 31 S.T.C. 215 referred to above. The following has been quoted from the decision of the Nagpur High Court reported in A.I.R. 1938 Nagpur 254:- " The test to my mind is this. Does the commission agent when he sells have authority to sell in his own name? Has he authority in his own right to pass a valid title? If he has then he is acting as a principal vis-a-vis the purchases and not merely assessee an agent and therefore from that point on he is debtor of his erstwhile principal and not merely an agent. Whether this is s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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