USHA SALES PRIVATE LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) THESE cases have been filed by two different assessees under S. 41 of the Kerala General Sales tax Act, 1963; and both of them relate to the year 1964-65. They arise out of the same fact; and the questions for decision are also the same. They were, therefore, heard jointly, and are being disposed of by this single judgment.

(2.) THE petitioner in T. R. C. 102 of 1967 is the Jay engineering Works. Ltd. (hereinafter referred to as the Company ). It carries on business, as manufacturers of sewing machines, electric fans, etc. THE Company has its registered office at Calcutta , and a factory in West Bengal. THE petitioner in T. R. C. 93 of 19o7 is Usha Sales (Private) Ltd. (hereinafter referred to as the agents); and their registered office is at Dell By an agreement dated 1st May 1962, the Company appointed the Agents as sole selling agents for the sale of the Company's products for a period of five years commencing from 1-5-1962. We shall quote hereunder some of the clauses of the said agreement, which are relevant for the purpose of these cases: 1. THE Company hereby appoints the Agents as their sole selling Agents subject to Clause. 17 hereinafter mentioned for their products in the Union of India and abroad except the State of West Bengal but including cooch Behar and Purvilia, for a period of five years commencing from 1st day of may 1962. 2. THE Agents hereby agree that during the period of the agency they will take delivery of all the goods of the Company in the manner and in the terms hereinafter provided. 3. X X X X 4. THE Company will deliver the goods in Calcutta to the agents as per their instructions. THE agents will make their own arrangements to despatch the same. THE liability of the Company will cease on handing over the goods to the Agents. 5. THE Agents will pay to the Company within 90 (Ninety)days from the date of submission of Bills for the goods delivered to them. 6. THE Company shall have the right from time to time to revise the prices of its products according to the market conditions at its sole discretion, but before making such revision the Company shall consult the agents. 7. xxxxxx 8. xxxxxx 9. THE Agents will have to see that the goods of the company are sold, to the consumer at the prices fixed by the Company from time to time. THEy will be allowed to give commission and rebate to the parties at their discretion. In the case of Hire Purchase, the Agents will be at liberty to charge extra money over and above the rates fixed by the Company from time to time, provided that extra price to be charged by the Agents will be fixed by mutual consultation with the Company. 10. x 11. THE Agents will be paid the following by way of discount and commission: xx x 12.12 to 16. x x x 17. All government Tenders will be quoted by the Agents including the State of West Bengal. As regards the rate contracts by the Company with the various Government Departments and the contracts by the Company with other parties, the Company will supply the goods direct, in which case the Agents shall be entiled over-riding commission at the rate of 5 percent. THE Agents will have to follow and keep contact with the government with regard to the Rate Contracts under instruction from the Company and they will have to do all efforts to procure orders from them. All costs incurred in this connection will have to be borne by the Agents. 18 & 19. x x x 20. THE. . . Agents will be required to lift the entire production of the Company leaving 10 per cent for sales in West Bengal within 11/2 months from the date of production. xxx 21 & 22 x x x 23. Notwithstanding anything to the contrary contained in these presents, the Board of Directors of the Company shall be authorised to modify from time to time with the consent of the Agents, the terms of this agreement so far as the Same shall be necessary in the interest of smooth working or otherwise. 24 to28. xxx

(3.) IT is true that both these cases arise out of the same facts, and the questions raised therein are also the same. But in our opinion, t. R. G. No. 102 of 1967 is not maintainable. When the Sales Tax Officer held that the Company was not liable to tax under the Act, it was a decision in its favour, though in the opinion of the Company its sales to the Agents attracted tax under the Act. We can understand the Company's apprehension that on the basis of the above finding the West Bengal Government may impose a tax under the Central Sales Tax, 1956 on its sales to the Agents. But the order of the sales-tax Officer at Ernakulam is not binding on the Company as regards its liability to Central Sales-tax in West Bengal; and its apprehension cannot be recognised under law. At any rate, an order by a Salestax Officer holding that an assessee is not liable to tax is not appealable under the State Act; and therefore the appeals filed by the Company to the Appellate Assistant commissioner, and then before the Appellate Tribunal were both misconceived. IT follows that the Company cannot also be aggrieved by the decision of the appellate Tribunal; and there is, therefore, no scope to file any revision from the said decision. We however, heard Shri. K. V. Surianarayana Iyer,the learned counsel who appeared in this Tax Revision Case, as the questions raised therein fall for our decision in T. R. C. No. 93 of 1967, and we considered that it would be useful to hear him also.