9911796707
TMI Blog1997 (7) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... Beena Prakash, Advocates, With him), for the respondents. -------------------------------------------------- The judgment of the Court was delivered by S.P. BHARUCHA, J.- In these appeals the challenge is to the common judgment of a Division Bench of the High Court See Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Peninsulax Traders [1992] 85 STC 527. at Kerala in tax revision cases. 2.. On 23rd March, 1970, the appellant, M/s. Peninsular Traders (now referred to as the firm ), entered into an agreement with the appellant, M/s. Indian Rare Earth Ltd. (now referred to as the company ), for the distributorship of trisodium phosphate . For the assessment years 1970-71 to 1973-74 the firm w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointment of the firm as one of the company s distributors for the said chemicals on the terms and conditions thereunder. Clause (1) stated that the firm would be the company s sole distributor for the said chemicals for the areas covered by the States of Tamil Nadu and Kerala. Clause (2) required the firm to sell the said chemicals on the company s behalf at prices to be fixed by the company from time to time, the current prices being set down, in addition to which the firm was entitled to charge reasonable transportation and other expenses incurred by it. Clause (3) stated that the selling price was subject to revision by the company at its discretion and that buyers from the firm would not be entitled to any compensation in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, there are clauses (4), (5), (7) and (8) upon which the High Court relied and which are stressed by learned counsel for the sales tax authorities. Clause (4) read thus: Full payment for the total quantity lifted by you should be made at the end of the month. For any delay beyond 30 days from the date of delivery of the material you will pay interest at the rate of 9 per cent per annum on the amount outstanding from time to time. If you make default in payment for a period of 2 months, the company reserves the right to terminate this appointment without notice to you. But the termination of the appointment will not prejudice the right of the company to proceed against you for the balance amount due to the company. Clause (5) stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old by month end. There is nothing in it which indicates that the property in the unsold chemicals would pass to the firm at month end. Clause (5) does not carry the matter further. Clause (7) is not an unusual clause, of the agent being responsible for the solvency of purchasers from itself; so also clause (8), the terms whereof are not an unusual obligation undertaken by an agent. 8.. The view that we take is supported by the observations of the Tribunal made in regard to the books of account of the company. The relevant entry, quoted below, speaks of the manner in which the parties implemented the agreement: We hereby certify that the sum of Rs. 11,79,097.00 being the value of 1,100.70 metric tonnes of trisodium phosphate sold by Me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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