9911796707
TMI Blog1981 (5) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that although tax on fans and sewing machines was deposited by the Company but from a detailed enquiry made by Sales Tax Officer. (Special Investigating Branch), it was established that this was a modus operandi adopted by assessee to evade payment of tax. And the assessee's claim that it purchased these goods from depot of the Company was a subterfuge. In fact, the assessee was sole selling agent and it made the sale in that capacity. The assessing authority pointed out that from agreement it was clear that even when sale was made by assessee it was subject to price fixed by the Company. This indicated that the relationship between assessee and the company was of principal and agent rather than purchaser and seller. Reliance was pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent dated 1-5-1967 which applied to assessment years 1967-68 and 1968-69, it was established that the assessee purchased the goods from company thereafter it sold as principal. Support was sought for the view from a decision given by Supreme Court in Bhopal Sugar Industries Ltd. v. Sales Tax Officer, 1977 UPTC 425 : 40 STG 42. On the question whether assessee was importer or net, the Revising Authority held, that these goods had been subjected to tax in the hand of Company as well. He did not find any merit in the submission that assessee's representative before S. T. O. (S. I. B.) had admitted that expenses of cartage of goods from railway station to the depot of company was made by assessee and it was the assessee who paid the salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement and it was argued that the assessee was appointed as sole selling agent in 1962. It continued to be so even now because in the agreement of 1967 everywhere assessee was described as agent. The learned counsel compared clause (1) of 1962 agreement with clause (11) of 1967 agreement and submitted that what was described as commission has now been described as sale. In fact, the word sale was only a camouflage as the manufacturer retained its control over price even when sale was made by assessee. And such a situation is concomitant with relationship of principal and agent rather than buyer and seller-Reliance was place on the following observation by Supreme Court in Bhopal Sugar Industries case (supra): - While interpreting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was modified and the assessee was required to purchase the goods from depots of Company where they brought the goods themselves then these conditions became conditions of sale with which they appear to be more close. The Revising Authority, therefore, did not commit any error in recording the finding that the relationship between the assessee and Company was of buyer and seller. 6. It was then argued that as assessee had made first sale after the goods had been imported into State otherwise than as a direct result of sale the assessee shall be deemed to be importer and the liability to pay tax being on importer under Section 3-A, the assessee was liable to pay tax. The argument has no merit as it having been held that Company brought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-State sale the movement of the goods from one State to another must be under an agreement of sale or the movement shall be incidental to the contract of sale. It has been seen above that since 1963 the goods are brought by Company itself to their depots maintained in the State. The Railway receipts are in their name. The Octroi etc. is paid by them. It is they who bear the costs of transportation from railway to their godowns. Admittedly the goods did not move in pursuance of any agreement of sale. The assessee might be purchasing 90% of the goods produced but by that alone the movements of goods did not become as incidental to the contract of sale. Similar controversy arose in the case of assessee in the State of Kerala where simila ..... X X X X Extracts X X X X X X X X Extracts X X X X
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