1980 (9) TMI 268

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....ion of India to come to the conclusion that the applicant dealt with the amounts found short by the said Inspector and whether the Tribunal was justified in assessing tax on those shortages noticed? (2) Whether, on the facts and in the circumstances of the case, the Member, Additional Sales Tax Tribunal, is correct in law in bringing the tax liability of the assessee for the purchase of paddy and sale of rice which were admittedly transacted on account of the principal, F.C.I., as their agent and the agent's failure to account to the principal?" S.J.C. No. 174 of 1976 is a reference made by the Tribunal pursuant to an order of this Court on the assessee's application under section 24(2)(b) of the Act and the following question has bee....

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....hase and milling of paddy and storage of rice and paddy. But the agent is not certainly authorised to sell rice and paddy beyond the terms of agreement entered into by them. The Food Corporation of India who is the principal in relation to the dealer for the purpose of purchasing and milling of paddy has not certainly authorised the dealer to appropriate the stock of paddy and rice in the manner other than stipulated in the terms of agreement. Therefore, the Food Corporation of India moved the District Magistrate, Balasore, to take action against the dealer for having abused the terms of appointment of agency by him. Hence for the unauthorised action committed by the agent beyond the terms of agreement the principal cannot certainly be made....

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....addy or sale of rice. The relevant I.C.T.'s report which is the basis of the disputed assessment is available at pages 22 and 23 of the assessment record. The allegation is thus based on mere presumption of facts without any independent enquiry or independent proof. Without such independent proof the best judgment assessment cannot be sustained. Mere shortages also will not make a dealer liable to tax on purchases or sales as decided by the Honourable High Court in the case-law cited by the appellant. As rightly argued by the learned Advocate, the appellant has been paid for the packing of the rice delivered to the F.C.I. at specified rates on every quintal of rice and not for every gunny bag supplied. The payment is thus clearly for the pa....