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TMI Blog2003 (5) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... ipals and has charged purchase price and 5 per cent commission for handling the coal. He has not made any sales in his own account. The freight has been charged separately in the bills from the principals. The freight thus charged cannot form part of the turnover. It is further admitted that the opposite-party has used Form 31 for import of coal in U.P. and has also issued Form-C as is apparent from the assessment order dated 29th May, 2001 for the Assessment Year 1998-99. It is also admitted to him that he has got only oral orders from his principals. The delivery of coal was given to the principals directly from the railway station by endorsing the railway receipts in their favour. The Assessing Officer as well as the First Appellate Authority have not accepted the contention of the opposite-party that he is a coal agent, in the absence of any material on record. The freight was added in the turnover and, therefore, tax was charged accordingly. However, the Tribunal in second appeal has accepted the case of the opposite-party and recorded a finding that the opposite-party was an agent and the purchases made by him were made in the course of agency business. 4. I have heard Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the matter should have been remanded back to the First Appellate Authority by the Tribunal. Contrary to it Sri Saxena placed reliance upon the observations of the Supreme Court that in these proceedings the High Court while exercising powers under Section 11 of the Act cannot interfere with the finding of the Tribunal on this issue which is basically a finding of fact. Heavy reliance was placed by the Counsel for the opposite-party upon 1988 U.P.T.C. 218, M/s.Vinod Coal Syndicate (supra). The controversy involved in that case was an entirely different one. In that case the assessee was a commission agent in coal business. The controversy was as to whether the amount paid by way of freight by the principals to the assessee, who was a commission agent was liable to be included in the taxable turnover of the dealer. Reversing the judgment of the High Court, the Supreme Court in that case on the plain language of Section 2(i), Explanation-II, held that when the freight was charged separately that amount could not be included in the turnover of the dealer. In that case it was not in issue as to whether the dealer is a commission agent or doing business on his own account. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the customers. An agent is defined under Section 182 of the Contract Act. 9. The essential point about the agent's position is his power of making the principal answerable to third persons. The agency may be constituted by an express limited authority to make such a contract, or a larger authority to make all falling within the class of description to which it belongs, or a general authority to make any; or it may be proved by showing that such a relation existed between the parties as by law would create the authority, as, for instance, that of partners, by which relation, when complete, one becomes by law the agent of the other for all purposes necessary for carrying on their particular partnership, whether general or special, or usually belonging to it, or the relation of husband and wife, in which the law, under certain circumstances considers the husband to make his wife an agent. In all these cases, if the agent in making the contract acts on that authority, the principal is bound by the contract, and the agent's contract is his contract but not otherwise. (See Broom's Legal Maxims, Tenth Edition, pages 566, 567). 10. In A.I.R. 1967 All 308, Loon Koran Soh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , since the agent is not the owner of the goods if any loss is suffered by the agent he is to be indemnified by the principal. This is yet another dominant factor, which distinguishes an agent from a buyer - pure and simple. 12. In the aforesaid case, the Supreme Court has relied upon following observations made in A.I.R. 1967 SC 181, Gordon Woodroffe and Co. v. Sheikh M. A. Majid and Co.: The esssence of sale is the transfer of the title to the goods for price paid or to be paid. The transferee in such case becomes liable to the transferor of the goods as a debtor for the price to be paid and not as agent for the proceeds of the sale. On the other hand, the essence of a agency to sell is the delivery of the goods to a person who is to sell them, not as his own property but as the property of the principal who continues to be the owner of the goods and who is therefore, liable to account for the proceeds. 13. In A.I.R. 1968 SC 784, M/s. Sri Tirumala Venkateswars Timber and Bamboo Firm v. Commercial Tax Officer, Rajahmundry, distinction between a contract of sale and contract of agency was pointed out with reference to Sales of Goods Act. The essence of contract of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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