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TMI Blog1957 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... December, 1954, and to show cause why they should not be assessed to tax and penalty for the said period and to produce on that date all books of account for the said period. Another notice was also served upon the assessees under section 14 of the Bombay Sales Tax Act, 1953, in which it was alleged that the assessee were liable to pay tax under the Bombay Sales Tax Act, 1953, for the period between 1st November, 1952, and 31st March, 1954, and that the assessees had failed to apply under that Act for registration or licence. That notice also required the assessees to attend before the Sales Tax Officer, Enforcement Branch, on 15th December, 1954. The assessees appeared before the Sales Tax Officer and applied for adjournment to enable them to make an application to the Collector of Sales Tax to determine the question whether they were "dealers". Thereafter on 21st December, 1954, an application was addressed to the Collector of Sales Tax, Bombay, by the assessees for determination of the questions whether the assessees were "dealers" within the meaning of the term as defined in section 2(c) of the Bombay Sales Tax Act, 1946, or section 2(6) of the Bombay Sales Tax Act, 1953, wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wspaper Society, was set out and that custom, it was alleged, was that the remuneration to the assessees was paid by the newspapers or journals in which the advertisements were released and that the asses- sees billed the advertiser for getting the layouts and designs prepared in respect of the advertisements to be released; and that the assessees also billed the advertiser for the amount which they had to pay to the block-makers and engraving studios for preparing the blocks. It was then stated in paragraph 5: "In respect of the technical service and assistance rendered by the petitioners (assessees) to the block-makers as aforesaid the block-makers give to the petitioners remuneration at the rate of 15 per cent. on the amounts billed by the block-makers". These averments made in the application by the assessees to the Collector of Sales Tax were substantially admitted by the Sales Tax Department. The Collector by his order, dated 4th July, 1955, held after setting out the facts that it was obvious from the documentary evidence produced by the assessees that the estimate form of contract passed between the assessees and the advertiser, the form of indent on order placed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d includes a State Government which carries on such business and any society, club or association which sells goods to, or buys goods from, its members." There is an explanation and an exception to that definition with which we are not concerned in this reference. It is evident from the definition that a person in order to be a dealer must carry on the business of selling or buying goods in the State of Bombay. Whether that business is carried on on his behalf or as a commission agent for another is immaterial for the purpose of the definition. The question which arises for determination is whether on the facts found by the Sales Tax Tribunal the assessees can be regarded as dealers within the meaning of section 2(6) of the Act. As we have pointed out, the Sales Tax Tribunal found that the assessees were merely acting on behalf of their principals when they got prepared blocks from the block-makers for advertising the goods of their principals. The Tribunal has also ob- served that the commission received from the block-makers is commission which is in the nature of brokerage. In this reference the learned Advocate-General has submitted two contentions: (1) that the Tribunal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for whom the block is to be pre- pared. The last document is Exhibit D, which purports to be a bill sent by the assessees to an advertiser for expenses incurred in the advertisement for the cost of preparation of art-work with photoprints and the headline and typing of the name and address and also for the ex- penses of blocks supplied to certain newspapers. Now, the document Exhibit A merely gives estimates of the charges which the advertiser has to pay for advertisement of his products. This is admittedly exclusive of the production charges, and the contract ex- pressly authorises the assessees to contract and release advertisements on behalf of the advertiser. This document shows that the assessees are acting as agents on behalf of the advertiser in the matter of securing and publishing the advertisements of the advertiser. It is undisputed that the estimates given in the document are not inclusive of the expenses of type-setting, art-work and blocks, stereos, etc. On the question whether the blocks were being purchased by the assessees, this document has no relevance whatever. The document Exhibit B is an order by the assessees to a newspaper on behalf of the advertiser giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the block-makers or agents of the advertiser for preparing the blocks in the business of advertising for and on behalf of the advertisers. As we have already observed, the averments made in the applica- tion to the Collector were not denied by the department before the Sales Tax Tribunal. In the application, the assessees have clearly alleged that they were acting as agents of the advertiser. That allega- tion not having been challenged and documentary evidence, on which reliance was sought to be placed, not being inconsistent with the claim made by the assessees, it is difficult for us to hold that the Sales Tax Tribunal was in error in concluding that the assessees were merely agents of the advertiser and not purchasers of the blocks required for purposes of advertisement of the products or services of the advertisers. If the assessees are not purchasers of the blocks for the purpose of carrying on their business but are regarded as merely agents, prima facie they do not fall within the definition of "dealer" in the Bombay Sales Tax Act, 1953. But the learned Advocate-General contended that even if the assessees were not purchasers of the blocks but were acting as agents, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchasing goods on behalf of the advertisers. The fact that the assessees are agents does not render them liable as dealers under the Bombay Sales Tax Act, 1953. The learned Advocate-General contended before us that in this case all the evidence which has a bearing on the status of the assessees has not been placed before the Collector and opportunity should be given to the Sales Tax Authorities to lead all the evidence which has a bearing on the question. We are unable to accede to that request. If before the Collector of Sales Tax and before the Sales Tax Tribunal the parties were willing to have the case decided on an admitted statement of facts, it would not be open to the Sales Tax Authorities now Page No: 600 to contend that they should be given another opportunity to lead evidence. We may observe that the application under section 27 filed before the Collector of Sales Tax was filed in so far as it related to the assessment of the assessees for two periods: (1) between 1st April, 1951, and 31st October, 1952, and (2) between 1st November, 1952, and 31st March, 1954. So far as those two periods are concerned, no other objection having been raised, the question whether the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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