1968 (11) TMI 87

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....f the Court was delivered by VEERASWAMI, J.-The common petitioner which is the Indian Insurance Companies' Association Pool, Madras, seeks prohibition forbidding the respondents from proceeding further to the notice of the first of them, with a view to assess sales of salvage to tax. The petitions cover 1961-62, 1962-63 and 1963-64. The pool was brought about by an agreement to which several regis....

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....ler and submit to the jurisdiction of the Sales Tax Authorities. A copy of the agreement containing the terms of the Indian Insurance Companies' Association Pool has been produced before us. The agreement is dated 3rd March, 1960, and purports to be between 19 Indian Insurance Companies named in the Schedule to the agreement and one other Indian Insurance Company, all of which transacted busine....

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....rom the agreement under which the pool was brought into being or the scope and character of the business carried on by the constituent insurance companies, that the pool was to engage itself in sales of salvage as a regular business proposition. That being the case, the matter should be looked at from the point of the nature and effect of contract of insurance, which is essentially one of indemnit....

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.... In that case, the petitioner would not be liable to be called upon to be registered as a dealer, and the sale of salvage will not attract sales tax. We are, however, not in a position, at the moment, to forbid the revenue from proceeding with the matter. Initially, it has jurisdiction to examine the position, in order to see whether the circumstances we have mentioned are present. We, therefor....