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TMI Blog1997 (11) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 31, 1984. Their agent PCL, it is said, kept quiet and dormant in not getting themselves registered under the CSTA for a major portion of the period of the said assessment year 1983-84. 3.. It appears, they filed an application for registration at the fag end of the said assessment year 1983-84 and consequent to the application so filed, they were registered as registered dealers with effect from January 30, 1984. Before they were registered as registered dealers it appears, they took steps for getting themselves appointed as agent of the assessee-dealers at Bombay for the sale of their cocoa products. In that regard, the Board of Directors of the assessee-dealers company passed a resolution on March 4, 1983 for appointment of PCL as their agent for effecting sales of their cocoa products. The resolution so passed was stated to have been approved by the general body meeting of the assessee-dealerscompany on March 19, 1983 recognising the said agency with effect from April 1, 1983. Despite the passing of the resolution by the Board of Directors and the general body meeting of the assessee-dealers-company, some delay occurred in issuing appointment order, appointing PCL as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rajan, learned counsel appearing for the assessee-dealers, the one and only point, which crops up for consideration is: Whether the order of the Tribunal in holding that the turnover of Rs. 9,09,820 for the assessment year 1983-84 is only stock-transfer on consignment basis for open market sale through agents and therefore not exigible to tax under CSTA, on the facts and in the circumstances of the case, is sustainable in law? 9.. The point: There is no pale of controversy that the assessee-dealers effected despatch of their cocoa products to their agent PCL for sales to be effected on consignment basis by way of stock transfer challans between January 20, 1984 and March 31, 1984, covering a turnover of Rs. 9,09,820. It is also not in dispute that PCL is the registered dealers under the CSTA with effect from January 30, 1984. Equally true it is that PCL got themselves appointed as the agent of the assessee-dealers with effect from March 4, 1985. A perusal of the file also reveals that PCL filed form F , covering the entirety of the turnover relatable to the period between January 20, 1984 and March 31, 1984. 10. The Revenue would contend that inasmuch as the assessee-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nover to the tune of Rs. 3,20,686 cannot at all be excluded from the domain of consignment sales effected through their agent, inasmuch as it is legally permissible for such an agent under the provisions adumbrated in the proviso to rule 12(5) of the said Rules to file a single declaration, covering the transfer of goods effected by a dealer during the period of one calendar month. 12.. The moot issue cropping up for consideration under the rival submissions of either counsel relates to the question as to whether it is always necessary that the agency must be in writing only, so as to enable the principal to claim the benefit of exemption on despatches effected from one State to another for sale on consignment basis through his agent. 13.. Before answering such a moot issue, we rather feel, impelled to refer to certain precedents emerging from the apex Court, in order to draw necessary inspiration and guidelines. (a) In Gordon Woodroffe Co. v. Sheikh M.A. Majid Co. [1966] Supp SCR 1 what their Lordships of the Supreme Court said relatable to the difference between sale and agency to sell -which is relevant for our present purposeis reflected, as below: The essence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble inference that the parties did in fact intend that that status would be conferred. Thus, the mere formal description of a person as an agent or 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. It is always open to the buyer to purchase goods for a limited purpose and within the field of that limited purpose the buyer has absolute title to the property once it is delivered to him by the seller. The payment of commission by itself is not conclusive to show that the agreement was one of agency. The essential distinction between an agreement of sale and an agreement of agency is that, in the former case, the property is sold by the seller as his own property and, in the latter case, the property is sold by the agent not as his own property but as the property of his principal and on his behalf. 14.. The aforequoted decisions of the Supreme Court clearly spelt out essential distinction between agreement of sale and agreement of agency . No doubt true it is, that the Supreme Court happened to consider in those decisions, written agreement existing between the parties, in drawing such a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of railway, steamer or ferry station or air port or post office or road transport company s office from where the goods were despatched No. and date or railway receipt or postal receipt or goods receipt with trip sheet of lorry or any other document indicating the means of transport Date on which delivery was taken by the transferee The above statements are true to the best of my knowledge and belief. (Signature) (Name of the person signing the declaration) *(Status of the person signing the declaration in relation to the transferee) *(Status of the person signing the declaration in relation to the transferor) Date............. *Strike out whichever is not applicable Note.On the counterfoil ... To be retained by the transferee On the duplicate ... To be retained by the transferor On the original ... To be furnished to the assessing authority in accordance with the rules framed under section 13(4)(e). (This form is in triplicate, identical, except for the Note below as indicated above.) (c) Rule 12(5) of the Rules and the first proviso adumbrated therein-relevant for our present purpose-reflect as below: 12(5). The declaration referred to in sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ighth Edition, 1995 Volume I, reflecting thus: A later-registered dealer issuing F form for a pre-registration period.There seems to be lesser difficulty in coming to the conclusion that there is no bar to a later-registered dealer in obtaining, when he is properly registered, declaration form F from his appropriate tax officer and using it in respect of consignments received during the period he was not registered. The information required on the body of the form as to the date from which registration is valid may not be construed in a restrictive sense but only in an informative sense. Provisions are to be interpreted in a manner to help their proper working. Form F is a document of evidence. 19.. In the light of what we have said as above, the factual matrix of the instant case, if sifted and scanned in broad spectrum analysis, cocksure it is, we feel that the offending transactions cannot at all be construed as inter-State sale exigible to tax at ten per cent. But, on the contrary, they have to be construed as despatch effected from the State of Madras to the State of Bombay by the assessee-dealers for consignment sales through their agent PCL by stock transfer c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all those discounts mentioned are either given to the ultimate buyers as trade discount or incurred as expenses by way of octroi duty and for clearing the goods despatched by the principal to the agent. From this, we can easily come to the conclusion that PCL effected sales of all the cocoa products of the assessee-dealers, not as their own goods, but as those of the goods of the assessee-dealers. Therefore, it is rather crystal clear that PCL acted as agent of the assessee-dealers in effecting sales of their cocoa products at Bombay. 21.. No doubt, as we have earlier indicated, they got themselves registered as registered dealers under the CSTA at Bombay, only with effect from January 30, 1984. While interpreting the salient provisions adumbrated under subsection (1) of section 6-A of the CSTA and form F prescribed under sub-rule (5) and the first proviso thereto of rule 12 of the Rules, it is seen that there is no need or necessity at all under the CSTA for the agency to be always evidenced by a document in writing; but it may also be oral and such an agency is deducible from the very nature of the transaction that took place between two different individuals at different e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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