9911796707
TMI Blog1983 (4) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Rallis India Limited only. The assessee did not raise invoices on the Algerian importer. The goods were shipped of f.o.b. condition in the port of Madras on behalf of M/s. Rallis India Limited. There was no privity of contract between the assessees and the foreign importer. Therefore, the Joint Commercial Tax Officer, Explanade-II Circle, thought that the exemption granted to the assessee required reconsideration in the light of the decision of this Court in Erattamuthu Nadar v. State of Tamil Nadu [1971] 28 STC 649 and proposed to disallow the exemption already granted on the turnover of Rs. 8,89,938.80 and to include the same in the taxable turnover at 3 per cent under the Tamil Nadu General Sales Tax Act, 1959. The assessee had also realised Rs. 9,861 as profit on sale of capital assets during the year 1970-71 and the joint Commercial Tax Officer proposed to treat the sale value of the fixed assets as exigible to tax at 3 per cent. The profit and loss account for the year 1970-71 also indicated the receipt of Rs. 1,58,976 as Government subsidy, earned oil export transaction and this was also sought to be included in the turnover taxable at 3 per cent. Therefore, a notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be towards export. The learned counsel for the assessee has not given serious thinking to the other objections, viz., that the assessment was barred by limitation as the final order was passed beyond five years or that the assessing officer had no jurisdiction to revise the assessment under section 16(1)(a) on the ground that the disputed turnover was exempted in the earlier proceedings under section 12 of the Act. Once if this Court comes to the conclusion that the petitioner is not an exporter, then the abovesaid objections will automatically stand answered against the assessee. Several documents filed on the side of the petitioners require a careful consideration to give a finding on the main and important point in dispute. The main point in dispute is, whether there is any privity of contract between the petitioners and the foreign buyer and whether the petitioners have acted as an exporter or as an agent of M/s. Rallis India Limited. The assessee has produced the original set of documents before the Tribunal. The first and foremost document which is relied on for the purpose of the export of iron articles by the petitioners is the letter of the petitioners dated 15th Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Rallis India Limited in their telex dated 21st June, 1969. The above confirmation letter of the foreign buyer also shows that the negotiation took place only between the foreign buyer and M/s. Rallis India Limited, and that the foreign buyer had nothing to do with the petitioner. Next we find another letter of the foreign buyer addressed to M/s. Rallis India Limited dated 27th June, 1969, confirming once again the firm order on the conditions prescribed by M/s. Rallis India Ltd. in their telex message. It is after this letter, we find the letter of the petitioners dated 11th September, 1969, addressed to Thiru K. Gurumurti of Rallis India Ltd., New Delhi, in which the petitioners have informed that they had concluded direct order through Tata Exports with the Algerian buyer. The message reads as follows: "From Ramaswamy to Gurumurti just concluded direct order through Tata Exports with your Algerian buyer 2000 T at price net dollars 111 plus renelu extra for Madras request your obtaining same terms for 6000 T understand getting export licence otherwise difficult as floor prices have been increased by another 12 dollars from yesterday." In the above letter the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e message dated 12th September, 1969. In reply to that message, M/s. Rallis India Limited have sent a letter dated 22nd September, 1969, which is found at page 54 of the typed set, informing the assessee that M/s. Rallis India Limited had sent a telex to the Algerian importer conveying the demand for extra price of 7 dollars per ton. The copy of the message sent to Algerian importer has been enclosed with that letter. Thus Rallis India Limited has been treating the assessee only as their agent for the purpose of completing export contract entered into by them with the Algerian buyer. Rallis India Limited have got their own separate merchanting division and the correspondence between the assessee and Rallis India Limited proves the same. In the letter dated 24th September, 1969, by Rallis India Limited to the assessee, found at page 57 of the typed set, Rallis India Limited, have stated as follows: "Further to the discussions we had today, we send herewith a copy of the telex invoice we have sent to our buyers asking them to open a confirmed irrevocable letter of credit for a value of Rs. 7,79,240. This has been arrived at on the basis of the prices as given in the enclosure, to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the invoice." At the bottom of the said form of undertaking a certificate has been given by the assessee to the following effect: "We confirm that we have agreed to supply the above materials for export to M/s. SOCIETE NATIONALE DE SIDERURGIE, Algeria, on FOB/C E basis. We are main Regd. and billet rerollers/ISI licensed rerollers and a LETTER OF AUTHORITY MAY BE RECOMMENDED TO BE ISSUED IN OUR FAVOUR." Thus, the assessee has expressed in clear terms that by agreement as agents for Rallis India Limited they are the registered and licensed billet rerollers to enable the Rallis India Limited to fulfil their export contract. The next important document is the revised sale note of November, 1969, enclosed along with the letter dated 22nd November, 1969, by Rallis India Limited to the Algerian importer. Clause No. 6 of the revised sale note relates to payment of full invoice value against shipment documents without recourse. The general conditions contain in all 11 clauses of which clause 7 relates to arbitration and clause 10 relates to extension of letter of credit. In both the clauses, it is stipulated that any dispute under the contract between Rallis India Limited and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh on the account of M/s. Rallis India Limited. The very mention of the words "for your account" runs counter to the argument advanced in favour of the assessee. It can only mean that on behalf of the Rallis India Limited, the assessee had undertaken the job of exporting the materials to the foreign importer for which account had been opened in the name of M/s. Rallis India Limited and not in the name of the foreign importer. Thus, the above letter also does not support the contention of the petitioners. The last document relied on by the petitioners is the invoice dated 10th June, 1970, found at page 85 of the typed set. Even at the outset it is seen that the invoice has been raised in the name of M/s. Rallis India Limited only, though below the name of M/s. Rallis India Limited the Algerian importers address is also typed. The earlier documents, viz., letter of credit, export licence and the letter of authority, given by the Rallis India Limited on 26th November, 1969, have been mentioned. The other documents filed in the case do not support the contention of the petitioners. Thus, all the documents in the case only establish the fact that M/s. Rallis India Limited are the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Yet another decision relied on by the assessee is the case reported in Akhtar Co. v. State of Tamil Nadu [1981] 47 STC 62, wherein it was held that so long as there is proof of agency and so long as the agent has sent the goods, not as his own, but as an agent of another as principal, there is privity of contract between the principal and the foreign buyer, even in cases when the agent has not disclosed the name of the principal. This is a converse case to that of the case reported in State of Tamil Nadu v. Rafeeq Ahmed Co. [1983] 52 STC 281. In this case the agent had exported the materials not as his own, but as agent of another as principal and a privity of contract was presumed between the principal and the foreign buyer, even when the agent had not disclosed the name of the principal. But this ruling is not applicable to the present case, since the assessee has acted only as an agent for the job of export sale and since there was a separate contract between the assessee and M/s. Rallis India Limited regarding the price of the material, which was sought to be exported by M/s. Rallis India Limited to the foreign buyer. There is absolutely no document to suggest that M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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