PROVINCIAL GOVERNMENT OF MADRAS Vs. NEELI VEERABHADRAPPA

JUDGEMENT

(1.) ALL these four second appeals by the Provincial Government of Madras raise interesting and difficult questions of law under the Madras General Sales Tax Act, 1939, (Madras Act IX of 1939), referred to in the judgment as "the Act"). The appellants were unsuccessful in both the Courts and hence these second appeals.

(2.) THE four suits out of which these second appeals arise were instituted in the District Munsif's Court of Bellary by different plaintiffs against the Provincial Government for a declaration that the assessment of sales tax imposed upon them was illegal and void. As the suits raised common questions of law and similar questions of fact, by consent of parties they were tried together and disposed of by a common judgment both by the District Munsif and by the learned District Judge.

(3.) BEFORE referring to the relevant provisions of the Act and the rules framed thereunder it is necessary to refer to the nature of the business carried on by the plaintiffs as established by the evidence in the case. The findings of fact by the courts below have been accepted on behalf of the appellants in these second appeals. The nature of the business which was proved by the evidence in the case was not seriously contested by the Government in the trial Court. The learned District Munsif carefully considered the evidence and stated his conclusion in very clear terms on this aspect of the case. In order to better appreciate the contentions that have been urged before us it is necessary to have those conclusions as background for this judgment. The matter has been ably and clearly summarised by the learned District Munsif in paragraph 8 of his judgment as follows :-"The villagers who raise groundnuts on their lands or on the lands taken by them on lease go to the shops of the plaintiffs and take empty gunny bags. Sometimes they also borrow money in advance. Sometime later after the groundnut crop on the land has been plucked, the ryots fill up the bags and bring their groundnuts to the plaintiffs' shops early in the morning. At these shops there will be certain coolies who will unload the carts for which they were immediately paid. A little later in the morning, the plaintiffs (who will hereafter be referred to as dalali merchants) send for prospective purchasers of the groundnuts. They are usually persons who purchase groundnuts to be sold again or to be used for expelling oil. From the accounts it is seen that most of the purchases were made by one T.G. Lakshmayya whose clerk has been examined as P.W. 6. T.G. Lakshmayya's accounts have been filed as Exhibits A-52 and A-53. After these prospective purchasers go to the shops the dalali merchants allow them to inspect the goods brought by the ryots. The different purchasers select their own bags. Thereafter the dalali merchants and the prospective buyers enter into a bargain about the prices. The ryot who is the principal seller would be consulted in the matter of fixation of prices and when the principal seller and the prospective buyer agree upon a definite price the sale by the ryot to the buyer is concluded. This would be done sometimes in the morning. Thereafter the buyer sends his clerk to the shop of the dalali merchant and in his presence and in the presence of the clerk of the dalali merchant and in the presence of the principal seller the groundnuts would be weighed by certain coolies who are called the chintalu coolies, the word "chintalu