9911796707
TMI Blog2011 (7) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing for the petitioner and Government Pleader for the respondents. The petitioner is a leading manufacturer of coco based chocolates and allied products. Raw coco beans are purchased by the petitioner directly and also through agents appointed by them. The agents purchase coco from farmers as well as from small traders and under agreement between them and the company, agents deliver coco at the godowns of the company located at various centres. There is written agreement between the company and the agents providing for reimbursement of price paid to farmers/dealers, all the cost incurred by the agents and also commission payable to them at the agreed rate. Coco beans is admittedly an item taxable at the point of last purchase in the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany until goods reach their stockyard where delivery is, given by the agents at the cost of the company. What we. notice is that though the entire cost reimbursed to the agent by the company may come within the description of "purchase turnover" the assessing officer has added only 15 per cent of other reimbursements to purchase price, reimbursed by the company to the agents for payment to farmers and dealers. Since the assessment confirmed in first appeal is reconfirmed by the Tribunal, in second appeal the company has come up with these revision cases. The contention raised by the counsel for the petitioner is that the transaction between the company and the agents is an agency agreement whereunder company reimburses purchase cost and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority on or before the 'fifteenth of the month succeeding that to which the sales relate along with a statement of such declarations showing the name and addresses of the dealers to whom the goods were sold with the particulars of sale bill, quantity, and value, and the total turnover covered by such declarations." What is clear from the above is that statutory form 25 is. issued only when a dealer purchases goods from another dealer and the declaration is to the effect that the selling dealer is not the last purchaser liable to pay tax. Under the scheme of the Act and Rules, unless the purchaser who issued form 25 resells the goods to another dealer in Kerala and obtain form 25 issued by such dealer, he will be liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factual position and the issuance of statutory declaration by the petitioner to their procuring agents stating that the petitioner purchased the goods from them, counsel for the petitioner submitted that the test of sale provided under Explanation 5 to section 2(xxi) of the KGST Act is not satisfied. Explanation 5 to section 2(xxi) of the Act sets out the circumstances under which transaction between agent and principal is treated as sale. The said Explanation reads as follows: "Explanation 5:- Notwithstanding anything to the contrary contained in this Act or any other law for the time being in force, two independent sales or purchases shall, for the purposes of this Act, be deemed to have ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent purchased the goods with his funds and at his own cost and risk and transports it to the godown of the petitioner and only after the petitioner accepts the goods and takes over possession, the goods become the petitioner's property. We do not know how the petitioner can contend that the purchase made from farmers and dealers by the agent with his funds and at his own cost and risk can be treated as purchase on behalf of the petitioner. The goods procured by the agents are only sold to the petitioner against form 25 issued by the petitioner. Though the arrangement is apparently stated as agency, the transactions prove otherwise. The agency arrangement appears to be only a scheme for splitting up of price between purchase cost, tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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