TaxTMI 
TaxTMI 
1971 (9) TMI 180
X X X X Extracts X X X X
X X X X Extracts X X X X
....hereon. The assessee's contention is that it acted as the selling agent of the Mithapur Works, Gujarat, (hereinafter referred to as the manufacturers) and the turnover in dispute does not represent inter-State sales. The assessee, therefore, denies its liability for the Central sales tax. The sales tax department, on the other hand, contends that the assessee purchased goods from the manufacturers and then sold them to buyers in Uttar Pradesh by transfer of documents while the goods were still in transit from the factory to the various destinations in Uttar Pradesh. According to the department, the assessee is liable to Central sales tax on such sales. The Sales Tax Officer did not accept the assessee's contention and levied tax upon it. The assessee did not succeed before the appellate authority but on revision, the revising authority held that the assessee was not liable to Central sales tax. The Commissioner of Sales Tax is aggrieved and has brought this reference for the decision of this court on the following two questions of law: "(1) Whether, under the facts and the circumstances of this case, the turnover of Rs. 6,75,890.17 from 1st October, 1958, to 31st March, 1959, in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d liquid chlorine where free delivery at the buyer's warehouse and collection of the empties is permitted under the trade custom you will deliver and collect the empties free of charge to the buyers, without any extra cost to us, within city limits in your port-town depots like Bombay, Madras, Calcutta and Cochin. For outside city limits, you may recover a reasonable delivery charge from the buyers. As for the inland depots, you may arrange for the delivery and return of the empties also at a reasonable delivery charge which may be recovered from the buyers. (8) That we shall fix the price at which our products will be sold from time to time as also make our own arrangements for their publicity. However, in the fixation of prices, as also in-the matter of publicity, we shall continue to consult you. (9) Agency commission: That you will be paid commission on the gross realisations calculated at the following slab rates: Rate of commission (a) For the first slab of sales up to Rs. 25 lakhs 3% (b) For the second slab of sales exceeding Rs. 25 lakhs but not exceeding Rs. 50 lakhs. 2 1/2% (c) For the third slab of sales exceeding Rs. 50 lakhs but not exceeding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u will submit to us every month the market reports from all centres where your depots are situated. (14) That you will render us a progressive sales statement every week, showing sales made in the week together with a remittance of 75 per cent. of the actual sale, and shall settle the final account for a particular month by the 20th day of the following month. (15) That you will also forward to us: (i) a weekly statement showing the quantity sold during the week, and (ii) a monthly statement showing the sales effected during the month and the stocks held at the end of each month. (16) The above agreement shall terminate on 31st March, 1954, but at any time after one year by giving six months notice to the other." This agreement was operative in the assessment year 1958-59. The working method of the assessee has been set out in an affidavit filed on its behalf before the Sales Tax Officer on 18th February, 1963. The material facts are contained in paragraphs 5, 6, 7, 9, 11 and 13 of the affidavit, which are reproduced below: "(5) That the deponent sales office secured orders on behalf of M/s. Tata Chemicals Ltd., Mithapur, from the respective dealers and the intimations ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee. If the sales are by the manufacturers to the buyers in U.P. and there is no intervening sale between the manufacturer and the buyer then it is the manufacturers who are liable to pay Central sales tax and not the assessee. The terms and conditions of agreement between the assessee and the manufacturers show very clearly that although the assessee was required to arrange the sale of the products of the manufacturers in U.P. yet the property in the goods so sold never passed to the assessee. The property remained vested in the manufacturers until it was transferred to the buyers. A perusal of the conditions set out above shows that the assessee was required to sell the various products of the manufacturers under their directions. The manufacturers were to fix the price for which the products were to be sold from time to time by the assessee. The assessee was to receive commission on gross realisations calculated on a slab system. The assessee was to receive a discount on the supply of various products but this discount was to be passed on by the assessee to its distributors. The manufacturers were to bear all expenses incurred by the assessee in respect of rebates, insurance ....