Case: State of Rajasthan &amp; Another Vs. M/s. Karam Chand Thappar &amp; Brothers (Coal Sales) Limited, Jaipur

er called the assessee has its Head Office at Calcutta and a Branch Office at Jaipur, and is registered as a "dealer under the Rajasthan Sales Tax Act, 1954. Under a contract dated September 2, 1948, with the Equitable Coal Company the assessee acquired monopoly rights to supply on behalf of the collieries, coal in certain areas including Rajasthan. Under an agreement date April 28, 1955, with the State of Rajasthan the assessee supplied coal to the State Power Houses upto May 19, 1958. The Sales Tax Officer, City Circle A, Jaipur assessed to tax the turnover of the assessee in the yearfrom the supply of coal to the State of Rajasthan.2. The assessee then moved a petition under Article 226 of the Constitution in the High Court of Rajasthan for a writ quashing the order of assessment of the Sales Tax Officer. The High Court accepted the plea that the assessee was not a dealer within the meaning of the Act and quashed the assessment. In appeal by the State of Rajasthan against the order of the High Court, this Court held that the assessee was a dealer within the meaning of the explanation to Sec. 2 (f) of the Rajasthan,Sales Tax Act, since the assessee was an agent for sale for the Equitable Coal Company which carried on the business of buying, selling or supplying goods in the State. But this Court remitted the case to the High Court for determination of certain other questions which were not decided.3. The High Court on remand held that there was no sale of, coal by the assessee to the State of Rajasthan; that in any event the sales weresales from the collieries in other States to the State of Rajasthan and that the Sales Tax Laws Validation Act 7 of 1956 which validated the levy of sales tax onsales till September 6, 1955, did not operate to vaildate the order of assessment, which was a composite order for the entire assessment yearThe High Court again issued a writ quashing the assessment. The State of Rajasthan has appealed to this Court with certificate granted by the High Court under Article 133 (1) (a) of the Constitution.

Reasoning:
The effect of the Control Order was only to superimpose upon the agreement between the parties the rate fixed under the Order.But on that account it cannot be said that the relation between the supplier and the person to whom the coal was supplied was not contractual. The contract between the parties was only modified by the statutory provisions.There was in the present case an of sale between the parties Competent to contract and in pursuance of the agreement of sale, property in the goods supplied passed to the purchaser for price agreed to be paid. The transaction was, therefore, one of sale of goods within the meaning of the Rajasthan Sales Taxis no inconsistency between the principles of the case of Ram Narain Sons Ltd.,STC 627 = (AIR 1955 SC 765  ) and Caltex (India) Ltd.,C 612 = (AIR 1966 SCRam Narain Sons Ltd.s case,STC 627 = (AIR 1955 SC 765  ) this Court, after declaring that the assessment was invalid, directed, that the matter will go back to the Assessment Officer for reassessment of the appellant in accordance with law : see pp.638 and 643 (of STC) = (at pp.771 and 773 of AIR). In Caltex (India) Ltd.s .case,C 612 = (AIR 1966 SCthe Court issued a writ of mandamus prohibiting the the State from realizing sales tax with regard to the transactions on which the sales tax was not validated by the Sales Tax Laws Validation Act, 1956. The effect of the two orders is the same.