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TMI Blog1990 (11) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... effected under an agreement dated August 13, 1975 entered into between the assessee and Sri Mahavir Prasad Suresh Kumar. To the preassessment notice the assessee objected and contended that the sales were not inter-State in character and that Sri Mahavir Prasad Suresh Kumar was only a depot keeper. Rejecting those contentions the assessing authority held that the sales were liable to be taxed under the Central Sales Tax Act and completed the assessment by his order dated September 30, 1979. Aggrieved by that order petitioner preferred appeals before the Additional Deputy Commissioner of Agricultural Income-tax and Sales Tax (Appeals), Ernakulam. The first appellate authority also found that the transactions were inter-State in nature. A second appeal was preferred before the Sales Tax Appellate Tribunal, Trivandrum. The appeal was transferred to the Palghat Bench. Rejecting the arguments of the petitioner the Tribunal upheld the view of the lower authorities. The assessee has come up in revisions against the orders of the Tribunal. 4.. Heard Sri P. Balachandran, counsel for the petitioner and Sri N.N. Divakaran Pillai, Senior Government Pleader for the respondent. 5.. Relying o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot necessarily lead to the conclusion that the depot keeper acts merely as an agent of the company. 8.. The Supreme Court in Alwaye Agencies v. Deputy Commissioner of Agricultural Income-tax and Sales Tax, Ernakulam [1988] 70 STC 107 held that it is well-settled that the mere fact that the manufacturer fixes the sale price, by itself, cannot lead to the conclusion that the distributor is merely an agent. The Supreme Court observed that it is significant that under the agreement what the distributor got is described as a "rebate" and not as "commission", as one would normally expect in an agreement of agency. This is a factor which is by no means conclusive, but to a certain extent indicative of the relationship between the said company and the assessee. In that case the supplies were made to the distributor against payment either immediate or deferred as provided in the agreement. It is also significant that where there was some time-lag between the sending of the goods and the payment, the goods were to be insured at the cost of the assessee. This circumstance, according to the Supreme Court clearly shows that in respect of the goods despatched under orders placed by the distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intimating the assessee about remittance of money through the State Bank of Hyderabad. These letters would suggest that the goods were sold to the depot keeper by the assessee. Apart from other materials available the Tribunal has rightly placed reliance on these letters also. 12.. In the facts and circumstances of the case we are of the view that the Tribunal was right in holding that there has been a transfer of the property in the goods from the assessee to the depot keeper and that the relationship is not one of principal and agent. 13.. On the second point it is contended by the learned counsel for the assessee that the transactions are not inter-State sales liable to tax under section 3(a) of the Central Sales Tax Act. The contention is that the goods were booked from Kerala State to the State of West Bengal in the name of the assessee and the depot keeper had received those goods on behalf of the assessee. It is further contended that the movement of goods is neither in pursuance to the agreement nor was the movement occasioned by sale. In order to ascertain whether the sale has taken place in the course of interState trade or commerce we have to refer to section 3(a) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Officer [1985] 60 STC 301 had occasion to consider this aspect. That was a case where particular goods were manufactured in Hyderabad in satisfaction of an order placed by the buyer who decided delivery outside the State. The goods moved from the registered office at Hyderabad as the result of a covenant in the contract of sale or an incident of that contract that the goods manufactured at Hyderabad according to the specifications stipulated by the buyer should be the very goods delivered to him outside the State. The Supreme Court held that the Commercial Tax Officer was right in holding that the sale transactions were inter-State sales inasmuch as they satisfy the terms of clause (a) of section 3 of the Central Sales Tax Act. 17.. In English Electric Company of India Ltd. v. Deputy Commercial Tax Officer [1976] 38 STC 475 the Supreme Court held that when the movement of the goods from one State to another is an incident of the contract it is a sale in the course of inter-State trade and it does not matter which is the State in which property in the goods passes. What is decisive is whether the sale is one which occasions the movement of goods from one State to another. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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