TaxTMI 
TaxTMI 
1967 (11) TMI 94
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....os, timber and firewood at Gokavaram in the State of Andhra Pradesh. The firm had been registered as a dealer under the Andhra Pradesh General Sales Tax Act (No. 6 of 1957), hereinafter referred to as the "Act". For the assessment year 1962-63, the appellant submitted a return showing a gross turnover of Rs. 13,89,130.70 P. and claimed exemption on a turnover of Rs. 13,68,174.39 P. which according to the appellant represented the amount of sales effected by its commission agents and sales of firewood. By a notice dated November 28, 1963, the Commercial Tax Officer, Rajahmundry, called upon the appellant to show cause as to why it should not be assessed for the year 1962-63 on a turnover of Rs. 13,89,130.70 P. at 2 per cent. Eleven items ....
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....dhra Pradesh under Article 226 of the Constitution praying for the grant of a writ in the nature of certiorari calling for the records relating to sales tax assessments of the appellant for the year 1962-63 and quashing the notice dated November 28, 1963, issued by the respondent. By its judgment dated April 16, 1964, the High Court dismissed the writ petition. This appeal is brought by a certificate granted by the High Court. On behalf of the appellant it was contended, in the first place, that Explanation III to section 2(1)(n) of the Act enlarged the scope of the word "sale" and by means of a fiction converted what are not sales in law into taxable sales for the purpose of the Act and, therefore, the Explanation was ultra vires of the....
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....when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser, or (2) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid- (i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate; or (ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate; or (iii) not to have accounted to his principal for the entire collections or deductions made by him, in the sales or purchases effected by him on behalf of his principal; or (iv) to have acted for a fictitious or non-existent ....
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.... transferred" in clauses (1) and (2) of Explanation III on a proper construction means "when title to the goods is transferred" and so construed it is impossible to say that the Explanation enlarges the scope of the main section. It was pointed out by this Court in The State of Madras v. Gannon Dunkerley and Co. (Madras) Ltd. [1958] 9 S.T.C. 353., that the expression "sale of goods" in entry 48 in List II of Schedule VII of the Government of India Act, 1935, cannot be construed in its popular sense but must be interpreted in its legal sense and should be given the same meaning which it has in the Sale of Goods Act, 1930. It is a nomen juris, its essential ingredients being an agreement to sell movables for a price and property passing there....
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....r a price paid or promised to be paid. The transferee in such a case is liable to the transferor as a debtor for the price to be paid and not as agent for the proceeds of the sale. The essence of 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 will therefore be liable to account for the sale proceeds. The true relationship of the parties in each case has to be gathered from the nature of the contract, its terms and conditions, and the terminology used by the parties is not decisive of the legal relationship. For instance, in W.T. Lamb and Sons v. Goring Brick Company, Limited [1932] 1 K.B. 710., there was ....
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....ed the opinion of the Board, stated, as follows: "Under these circumstances it appears to their Lordships that the Chief Justice was justified in saying that the effect of the transaction was to give Ekstein every right which a vendor could legally claim, and to confer upon the defendant every right which a purchaser could legally demand. Does it make any difference that the parties have called this transaction by the name of a guarantee? It appears to their Lordships that because the parties have used this term 'guarantee' in a sense which is unusual and not applicable to this case-for Lippert really guaranteed nothing-the nature of the transaction is not thereby changed; and because they have said that Lippert was to be entitled to wha....