TaxTMI 
TaxTMI 
1982 (11) TMI 149
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....s an apex co-operative federation in the Union Territory of Goa. The prayers in the petition are: (a) for an order declaring that the petitioner-society was not liable to pay any sales tax in respect of cement handled by and delivered to the allottees under an agreement dated 14th September, 1978, between the petitioner and the Joint Controller of Cement, Government of India, New Delhi; (b) for an order restraining the respondents from recovering any amount from the petitioner-society by way of sales tax under section 5 of the Karnataka Sales Tax Act (hereinafter referred to as the Act); (c) for an order declaring that the petitioner-society was not liable to pay any additional tax under section 6-B of the Act; and (d) for an or....
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....nt Controller through the State Trading Corporation (hereinafter referred to as the Corporation). The Corporation as the sole agent of the controller while the goods are on the high seas raises its invoices on the society in its capacity as the handling agent which in turn is required to open a letter of credit on 30 days sight basis in favour of the corporation. The allotment of cement is made by the cement controller and the price is also fixed by him. The society as the handling agent, as claimed, is neither a stockist nor a trader, but it merely organises the labour for handling of the cargo from the ships to the docks and thereafter load the same into trucks or wagons at the docks to the allottees who are dealers in cement. The soci....
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....that it is not required to pay any additional sales tax under section 6-B of the Act because it is confiscatory in nature, as the petitioner society could not earn profits exceeding Rs. 3 per tonne while the additional tax charged under section 6-B of the Act is over Rs. 4 per tonne which not being transferable to the consumer is a burden on the society affecting its right to carry on business of its choice under article 19(1)(f) and (g) of the Constitution of India. It is further urged by the society that it is not liable to pay any additional tax because no sale is effected by the petitionersociety while delivering cement to the allottees chosen by the Cement Controller of India. It is further urged that the society does no more than hand....
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....espondents on the decision of the Supreme Court in the case of S. Kodar v. State of Kerala [1974] 34 STC 73 (SC); AIR 1974 SC 2272 wherein the provision corresponding to section 6-B of the Act in the Tamil Nadu Additional Sales Tax Act came up for consideration and the Supreme Court ruled that additional tax not being shown to be confiscatory cannot be held to be violative of article 19(1)(g) or (f) of the Constitution. That decision has been followed in some other subsequent decisions of this Court and section 6-B of the Act is held to be constitutionally valid. 8.. In the light of the pleadings, the only two questions fall for consideration and they are: (1) Whether the petitioner has demonstrated that the additional tax required to....
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....e agreement as per annexure A dated 14th September, 1978, clearly provides that the cement imported would be sold to the handling agents on the high seas by the corporation at the controlled price as fixed by the Government of India less the handling expenses referred to in para 1 of the letter (see para 3). Para 4 also provides that the sale by the corporation to the handling agents will be made on 30 days credit basis against irrevocable letter of credit or letter of authority or other suitable guarantees accepted by the corporation. In other words, even in terms of annexure A the agreement binding the society as the selling agent clearly indicates that the title in the imported cement passes on to the society on the high seas and the nom....