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TMI Blog1954 (4) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ve society, a club, a firm, or any association which sells goods to its members is a dealer within the meaning of this clause." To solve the problem raised it is necessary to refer to the provisions of the Coffee Market Expansion Act, 1942, under which the assessee Board was constituted. The Act was passed by the Indian Legislature on 2nd March, 1942, with a view to continue the provisions made under Ordinance XIII of 1940. The object of the Ordinance and the Act is to give assistance to the coffee industry by regulating the export and sale of coffee and by other means. This was done as declared by Section 2 of the Act with the object of the Central Government taking under its control the development of the coffee industry in the interests of the public. The control of marketing of farm produce for the economic benefit of the producers and to bring about collective marketing of the produce is a recognised feature of Governments of several countries, particularly, United States of America, Britain and Australia. The object is to prevent unhealthy competition between producers, to secure the best price for the produce in the local market, to conserve for local consumption as much pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch land is comprised in one estate or in more than one estate, should get himself registered. Under Section 15 the Central Government is empowered after consultation with the Board to fix the price or prices at which the coffee may be sold, wholesale or retail, in the Indian market and a registered owner or licensed curer or dealer is prohibited from selling coffee wholesale or retail in the Indian market at a price or prices higher than the price fixed by the Central Government. A registered owner is prohibited by Section 17 from selling or contracting to sell in the Indian market coffee in excess of the internal sale quota. Section 18 provides that a registered owner should not sell coffee unless it has been cured as provided by the section and he is also required to sell it in accordance with the provisions of the licence obtained from the Board under Sec- tion 24. An unregistered owner and a registered owner are prohibited from selling or storing in an estate coffee grown on any estate and not grown on his own. Section 20 vests the power of export of coffee in the Board or under an authorisation granted by the Board. Re-import of coffee exported except under the permit grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India and elsewhere of coffee produced in India or for promoting the technological research in the interest of the coffee industry in India. The second fund is the pool fund, and under Section 32 to this fund are credited all sums realised by sales by the Board of coffee from the surplus pool. The pool fund shall be applied only to (a) the making to registered owners of estates of payments pro- portionate to the value of the coffee delivered by them for inclusion in the surplus pool, (b) the costs of storing, curing and marketing coffee deposited in and of administering the surplus pool, and (c) the purchase of coffee not delivered for inclusion in the surplus pool. If after applying these there is any excess from the sums realised by sales by the Board of coffee from the surplus pool in the manner indicated above, such excess may with the previous sanction of the Central Government, be transferred to the credit of the general fund. The Board is also em- powered by Section 33 to borrow on the security of the general fund or the pool fund. Section 34 provides for payment to the registered owners, that is, to persons who have delivered coffee for inclusion in the surplus pool a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the pool, does undoubtedly aim to make a profit though not for itself. The profit need not neces- sarily accrue to the dealer who carries on the business of buying or selling goods as in the case of commission agents, as was held in this Court. The collective marketing activity or sale by the Board of the coffee which is under its control and custody of which it becomes the absolute owner under the provisions of the Act is undoubtedly the busi- ness of the Board of selling goods, and therefore the transactions of the Board now under consideration are clearly transactions of a dealer within the meaning of the General Sales Tax Act. The argument on behalf of the petitioner strenuously urged was that the Board was merely an agent of the producer and as the sale by the producer of his produce is excluded from the "turnover" definition in the Act, there is no justification for imposing the tax on the assessee. In support of this argument reliance was placed upon the decision of the Judicial Committee in Welden v. Smith(1). We not do think that this argu- ment is sound. There is no question of any agency between the pro- ducer and the Board, as there is no contract, express or imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Coffee Board under the statute under consideration is entirely different from that of the Govern- ment who under the agreement obtained the goods in the case before the Judicial Committee in Welden v. Smith(1). The learned Advocate-General appearing for the State drew our attention to the Australian decisions in which pooling legislation came for consideration. Under Section 92 of the Commonwealth of Australia Constitution Act the point raised very often was whether the acquisition or the vesting of the power under such legislation did not infringe on the freedom of trade conferred under this section. Under Section 92 of the Australian Constitution Act it was provided that "trade, commerce and inter-course among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free". This freedom gave rise to conflicting decisions in the Courts of Australia, that is, whether any sort of Government interference either by the executive or by the legislature constituted infringment of the freedom of trade and secondly whether the right which was guaranteed under Section 92 is binding on the Commonwealth or only on the States. The position was exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed to include, from other States; and there is no ground for the contention that any such burden or hindrance is imposed under the disguise of expropriation. The Act replaces individualist economy by a collectivist one for the distribution of milk within the area containing the most densely populated part of the States; and all that can be presumed is that the substitution was deemed by the legislature to be an expedient one for reasons only of health, hygiene, efficiency and the economic benefit of farmers in the milk-producing districts. I agree, therefore, that the operation of Section 26 is not inconsistent with Section 92 of the Constitution." [See also the observations of Dixon, J., in Field Peas Marketing Board (Tas) v. Clements and Marshall Pty Ltd.(2)] The petitioner's learned counsel attempted to distinguish the Australian cases on the ground, that the Acts under consideration in those cases expressly vested the product in the Board, whereas there is no such express provision in the Coffee Market Expansion Act. We do not think that this really alters the situation. The effect of the provisions of the Act does undoubtedly vest the coffee in the Board, as it is expressly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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