Case: Bagal Kot Cement Company Vs. State of Mysore

The appellant, Bagal Kot Cement Co. Ltd., is a manufacturer of cement. For the period 1st April, 1961 to 31st March 1962 it filed a Return be fore the Assessing Authority showing a total turn-over of Rs. 1, 11, 02, 243/-. The entire sum was shown as taxable turn-over on which an amount of Rs. 2, 25, 317.55 had been collected and paid as tax. No claim was made on behalf of the appellant be fore the Assessing Authority that it was not liable to pay any sales tax. The Authority accopted the Return and assessed the tax as per the appellants figure. It appears the appellant was advised thereafter to file an appeal before the Deputy Com missioner of Commercial Taxes and take the stand that in respect of the transactions in question it was not a dealer and was not lable to pay any tax. The Deputy Commissioner dismissed the appeal. A second appeal filed by the appellant before the Mys ore Sales Tax Appellate Tribunal also failed. The company took up the matter in revision to the High Court under section 23 of the Mysore Sales Tax Act, 1957- hereinafter called the State Act, read with section 9(2) of the Central Act. The High Court dismissed the revision. Hence this appeal.

Reasoning:
In our opinion there is no substance in the appellants argument. After having realized the sales tax from the various customers and voluntarily and ex-contractu paid it as per the Return submitted it was ill-advised to take an unsustainable stand of its not being liable to pay sales tax under the Centralcannot be any doubt that the sales of cement made during the period in question in the course of inter-State trade were exigible to sales tax under the Centralfacts were not disputed before us. Rather in the special leave petition it is admitted that the invoices were issued by the appellant company in its ownwould thus be seen from the course of conduct of the appellants business and the terms of agreement that the Company was not a mere commission agent or broker selling the goods on behalf of its principal-the Corporation. There was no privity of contract between the various customers of cement and the Corporation. No property in the goods sold was passed by the Corporation to them. After taking the symbolical delivery of the entire cement produced at the works of the company as per clause (1) of the agreement the company was in possession and custody of the goods. It was entering into contracts for sale of cement and selling it. The property in the goods was passed on to the buyers by the company. Under clause (7) it was authorised to collect sales tax both on intra-State and inter-State sales, and to discharge its liability devolving upon it as dealer under the various Sales Tax Acts and Rules. As per clause 13 of the agreement only the difference of price after deducting the companys remuneration was to be credited to the Corporationsthe facts stated above it is abundantly clear that sale was made by the appellant company as it effected transfer of property in the goods to the customers and realized sale price from them by issuing invoices in its own name. The restricted definition of the term dealer in the Central Act is not wide enough to cover all kinds of agents such as brokers or a commission agent simplicter as many of the State Acts include them within their definitions. As for example the term dealer defined in section 2(k) of the Mysore State Act includes "a commission agent, a broker or del credere agent or an auctioneer or any other mercantile a gent by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal;" The term dealer as defined in the Central Act would, however, include a del credere agent or a mercantile agent who carries on the business of buying or selling goods not as an agent simplicter on behalf of the disclosed principal but as a principal visa-vis itsagree with the above view of the learned Chiefour judgment it was the appellant company which carried on the business of selling cement although it was acting as selling agents of the Corporation. The Corporation was not the dealer which effected the sales but it was the company which did so.