SRINIVAS GOPIKISHEN BADRUKA Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The only question arising in these appeals by special leave from the judgment of the High court of Andhra Pradeshis whether the appellant firm can be regarded as dealer under section 18 of the Hyderabad General Sales Tax Act, 1950 (XIV of 1950) with respect to certain transactions of purchasing castor seed entered into by the Bombay Export Co. Ltd. , (hereafter referred to as the company) in the former State of Hyderabad on the ground that the appellant was the agent of the company.

(2.) It is common ground that the company having its registered office in Bombay had contracted to purchase 18,400 candies of castor seed in accordance with the rules of the Bombay Oil-seeds Exchange Ltd. , with respect to forward contracts. The castor seed was to be purchased at different places in the Hyderabad State and the purchaser company paid 50% of the price to the appellant firm and under a tripartite agreement entered into at Bombay between the appellant, the company and one Jitendra Prakash Goel, its guarantor, the balance of 50% was to be advanced by the appellant who was to take delivery of the castor seed in the presence of a representative of the company and store the castor seed with it at Hyderabad and other places where the purchases were effected. The goods were to remain with the appellant at the risk of the company. Further the goods were to be kept by way of security for the loan advanced by the appellant and before obtaining delivery of the goods from the appellant, the company was required to pay the balance of the price of the goods. There was also a term in the contract requiring the company to deposit additional margin money if there was a fall in the price of castor seed in the Bombay market. A further clause in the agreement gave a right to the appellant to sell castor seed either by entering into a vaida transaction in Bombay or by public auction or by a private treaty. By other terms the appellant as entitled not only to commission but also reimbursement in respect godown charges, insurance charges, hamali, carting expenses, transport charges, salaries of watchmen etc. , with interest.

(3.) The Sales Tax Authorities in Hyderabad assessed the appellant to sales tax for the years 1953-54 and 1954-55 in two separate proceedings upon a turnover of Rs. 4,07,599. 00 and Rs. 26,92,401. 00 for these respective years in respect of the purchases of castor seed made by the company in the former State of Hyderabad. The ground on which the appellant was assessed was that it was an agent of a non-resident and thus under section 18 of the Act was deemed to be a dealer within the definition of that expression in the Hyderabad General Sales Tax Act. Section 18 of the Act runs thus: