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TMI Blog1984 (11) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assistant Commissioner of Sales Tax. The respondents contended that (1) the invoices in question did not represent sales; (2) if these transactions were treated as sales, they were inter-State sales not liable to tax under the Bombay Sales Tax Act, 1959. The Assistant Commissioner of Sales Tax rejected the first contention. He also rejected the second contention on the ground that no evidence was produced in support of the same. The appeal, therefore, was dismissed. 3.. The respondents filed a second appeal before the Tribunal being Second Appeal No. 479 of 1971. The same two contentions were raised before the Tribunal. The Tribunal felt that the Assistant Commissioner of Sales Tax ought to have decided the second contention on merits. It therefore, remanded the matter to the Assistant Commissioner of Sales Tax for determination of the second contention under an order dated 4th January, 1973. The Tribunal did not give any decision on the first contention, but kept it open. 4.. Accordingly, the Assistant Commissioner of Sales Tax considered the second contention raised by the respondents. By his order dated 18th June, 1974 the Assistant Commissioner of Sales Tax, afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el and Drum Manufacturing Company Private Limited after receipt of a quota certificate for steel sheets made out in their favour which quota certificate was to be obtained by the respondents against their own exports. The contract further stated: "We (Bharat Barrel Drum Manufacturing Company Pvt. Ltd.) are sending you herewith a copy of the application form to be made by you to the sponsoring authorities for the advance quota for steel sheets, for the above sale of barrels to you. At the time of submitting your application you should please write to the sponsoring authorities that the quota certificate should please be issued in our favour, the fabricators of barrels, and that the quantity of 18 gauge cold rolled sheets in coils will be 200.00 tonnes, equivalent to 8,000 barrels." There was also a condition in the contract regarding an increase in the price of the barrels to be supplied if there was an increase in the price of steel sheets to be obtained under the quota certificate. 7.. Accordingly the respondents purchased from Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. 8,000 barrels under the said contract and used the barrels for filling castor oil which was expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vegetable castor oil; period Oct.-Dec., 1964." 10.. After the quota certificate was issued to the respondents, they wrote to Hindustan Steel Ltd., directing them to supply the steel under the quota to Bharat Barrel Drum Manufacturing Co. Pvt. Ltd. on their behalf and to receive payment for the goods supplied from Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. on their behalf. Railway receipts relating to the supply of steel by Hindustan Steel Limited to the respondents were retired by Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. on behalf of the respondents and the price for the same was paid by Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. to Hindustan Steel Limited on behalf of the respondents. 11.. After the receipt of the goods Bharat Barrel and Drum Manufacturing Company Private Ltd. issued seven invoices (debit notes) on 12th July, 1968 debiting the price paid by them in respect of the said goods to the respondents. There are corresponding journal entries in the books of account of the respondents. 12.. On these facts we have to determine whether the seven invoices and or debit notes dated 12th July, 1968 represent sales of steel effected b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available to the assessee as a quota holder. There was, therefore, no transfer of quota rights as submitted by Mr. P.C. Joshi, learned Advocate for the assessee. 15.. It was urged that in the application for a quota, the assessee had mentioned Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. as fabricators. Hence Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. had a right to obtain steel under the quota certificate. This submission must be rejected because the quota certificate is issued only to the assessee. It is by way of reimbursement to the assessee for containers already exported by him. It mentions the name of Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. Hence Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. had no right to obtain any steel under this quota certificate. 16.. It was next contended that the assessee was merely an agent of Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. in respect of the supply of steel. In this connection Mr. P.C. Joshi relied upon the following facts: (i) That the assessee directed the suppliers Hindustan Steel Ltd. to send the goods to Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. (ii) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to obtain a quota certificate by virtue of the export performance of the assessee could not have been transferred to Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. at all. They have accordingly shaped their transaction. The assessee obtained the quota certificate in his own name and thereafter transferred the steel which he obtained under the quota certificate to Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. at the same price at which the assessee obtained it from Hindustan Steel Limited. Looking to the transaction it is not possible to say that Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. had any beneficial interest in the quota certificates at all. 19.. Secondly even under the contract of 28th July, 1964 there was no right created in favour of Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. to obtain a quota certificate from the assessee or to utilise any quota certificate of the assessee. The assessee, however, was given a right to claim a rebate if he got his quota certificate in the name of Bharat Barrel and Drum Manufacturing Company Pvt. Ltd. Since this was not possible, he transferred the steel obtained by him under the quota certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person in a contract as an agent or a buyer is not conclusive, unless the context shows that the parties clearly intended to treat a buyer as a buyer and not as an agent. These observations were made by the Supreme Court in connection with the interpretation of a contract. The Supreme Court said that one must look to the substance of the transaction as disclosed in the contract in order to determine the nature of the contract. These observations have no relevance in the present case. The substance of the transaction as well as the form in which it is effected show in the present case that the transaction was a transaction of sale. 24.. Mr. Joshi has cited a number of authorities before us where the Supreme Court was required to examine the transaction in order to decide whether the transaction in question was a transaction of sale. All these cases turn upon the nature of the transaction involved in the case concerned. We will refer to them briefly. Thus, in the case of Khedut Sahakari Ginning and Pressing Society Ltd. v. State of Gujarat, reported in [1972] 29 STC 105 (SC) the Supreme Court was required to consider a case where a co-operative society carried on the business of g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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