9911796707
TMI Blog2001 (11) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... onresident principals. The dispute relates only to the assessment under the CST Act. In the assessment proceedings the assessing officer found that the appellant purchased 2,211 bags of cashewnuts on his own account. But as per the state ment of the dealer in respect of the said purchases invoices were issued by the dealer to the nonresident principals and the entire stocks have been dispatched to the principals at Kerala or in some other State. The assessing officer also found that the appellant had effected sales and purchase to Sri J.S. Ranganaikulu to the extent of 1,563 bags. The manner of the above sales and purchases on account of nonresident principals shows that the transactions were created to avoid Central sales tax. The goods we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls, as purchases on behalf of the nonresident principals. This was also treated as transaction in the course of interState sale and held that the entire turnover is liable to Central sales tax. 3.. Assailing the above order of the Commissioner, the learned counsel for the dealer contended that the Commissioner was in error in revising the order of the Appellate Deputy Commissioner. It is contended that though the dealer made purchases of cashewnuts on his own account, he can as well supply that goods, acting as an agent to the principal. There is no bar for such transfer of the stocks purchased on his own account, to the agency account of the non resident principal. In the process there is no interState sale, as the appellant was only act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and contended that there was no sale as he cannot sell to his own. The said claim was also negatived by the Orissa High Court. 4.. Relying upon the above decisions, the learned counsel contended that even assuming that the sale in favour of Ranganaikulu is treated as a nonexistent or fictitious transaction, still the transfer from his own account to the agent of the non resident principal can at the most be treated intraState sale and not interState sale liable to tax. The learned counsel also referred to the term "sale" as defined under section 2(g) of the CST Act and hence contended that the disputed turnover is not liable to tax under the CST Act. 5.. The learned Special Government Pleader for Taxes, on the other hand, supported the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of cashewnuts on his own account, but while supplying the 1,563 bags of cashewnuts to the nonresident principal, the sale was effected a day before they were actually supplied to the nonresident principal. The sale was effected to M/s. J.S. Ranganaikulu, within 24 hours, purchase was effected from the said dealer and the purchases were shown as if they were effected as an agent of the nonresident principal and those 1,563 bags of cashewnuts were supplied to the nonresident principal. Similarly 352 bags purchased by the dealer on his own account were supplied to the nonresident principal and claimed that these two transactions are not liable to tax under the CST Act as there was no direct sale. The explanation with reference to the sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sale. It could be treated as supplies to a nonresident principal without there being a transfer. We are unable to appreciate the said contention of the learned counsel. In fact, the sales effected by the dealer in favour of M/s. Ranganaikulu and within 24 hours the purchases were effected by the appellant as the agent of the non resident principal so as to create as if the purchases were made only as an agent to the nonresident, so as to avoid the Central sales tax payable by the dealer. Even with reference to 352 bags of cashewnuts purchased on its own account, they were transferred to the nonresi dent principals. The said transaction could only be considered as a sale in the course of interState sale. In fact at the time of hearing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent principals and therefore it is not a transaction of sale but only a purchase on behalf of the nonresident principal and therefore the transaction would not result in the interState sale and there is no liability under the CST Act. We are unable to accept the said contention. It is undisputed that the petitioner had purchased the stocks supplied to the nonresident principal on its own account and there is no evidence even to show that there was an agreement between the appellant and the nonresident principal for the supply of cashewnuts. In any case, as admittedly the purchases were effected on its own account, if such stocks are supplied to the nonresident principals acting as an agent, the same would result in transfer of the goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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