A. VELAYUDHAN NADAR Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner is a dealer in sugar. By section 5 -A(1 -A) of the General Sales Tax Act, 1125, the sale by a dealer of sugar and certain other specified commodities "other than stock of such goods in his possession, custody or control immediately before the 14th day of December, 1957" were exempted from taxation under sub -section (1) of section 3 of the Act.

(2.) SUB -section (4) of section 5 -A provides : "Subject to such rules, if any, as may be made by the Government in this behalf, the Government or any officer authorised by the Government may compound for consolidated payment the tax that would be payable on the sale of the goods mentioned in sub -section (1) in the possession, control or custody of any dealer immediately before the 14th day of December, 1957. In fixing the amount of consolidated payment to be accepted from any dealer under this sub -section, the amount, if any, payable as surcharge on the tax payable on the sale of such goods under section 3 of the Kerala Surcharge on Taxes Act, 1957, shall also be taken into account."

(3.) THE petitioner sought a revision of the order before the Deputy Commissioner of Agricultural Income -tax and Sales Tax (South Zone), Quilon. The Deputy Commissioner dealt with his contention regarding the 600 bags in controversy as follows : - "That the officer should not have included in the composition order 600 bags of sugar which was received by him only after 14th December, 1957. It is admitted that out of the above 600 bags, 400 bags were in transit on 13th December, 1957. It is also represented that these goods were consigned to self by the vendors, that the railway receipts were forwarded to the vendors' bankers at Trivandrum, duly endorsed in their name and that the bankers in their turn endorsed the receipt in favour of the buyer on payment of the value of the goods. So the petitioner became the owner of the goods only after 14th December, 1957, when the value of the 400 bags in question was paid and the goods taken delivery of. It is not however disputed that the goods in question were despatched in pursuance of orders placed by the petitioner and they were intended for delivery to the petitioner on payment of the value. Thus so long as the petitioner does not violate any of the terms of sale he has got control over the goods when once it is despatched and he can even enter into a contract with others for a re -sale of the goods even while the goods are in transit. So it is clear that the goods were in the control of the petitioner before 14th December, 1957, and the officer was right in including them in the composition order. It is also noteworthy that no excise duty has been paid on these bags of sugar. As regards the remaining 200 bags it is seen that these bags were despatched by the sellers only after 14th December, 1957, and that the excise duty due on them has been paid. The value of these 200 bags will therefore be excluded from the petitioner's taxable turnover."