S V NANNUSWAMI Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE question of law that arises for determination in each of these petitions is the same, and all the petitions can be disposed of by a single order. THE petitioners were dealers liable to be assessed on their turnover under the Madras General Sales Tax Act, IX of 1939. THEy were dealers in textile goods, and the goods handled by them in the relevant assessment years included cloth of superfine quality. T.C. No. 113 of 1958 arose out of the assessment proceedings for 1954-55, and the others related to the assessment year 1955-56. But the turnover of the petitioners on which they were taxed was all subsequent to 23rd August, 1954. THE provisions of section 3(2) of Act IX of 1939 were amended by section 2 of Madras Act 23 of 1957, and under section 1(2) of the Amending Act, the amendment was given retrospective effect from 23rd August, 1954.

(2.) THE statutory provision which we have to consider now is the first proviso to section 3(2) of the Act, and that proviso as amended by Act 23 of 1957 ran :

(3.) THE indenting agents were residents within the State of Madras. From the material placed before us it is clear that only a slight modification of what has been set out by the Tribunal is necessary. THE indenting agents procured the orders of the petitioners and forwarded them to the non-resident mills which sold the goods. THE order itself provided for alternative modes of delivery of the railway receipts for the consigned goods. THE railway receipts could be sent through bank or sent "direct". THE railway receipts sent direct again apparently fell under two categories, railway receipts delivered to the petitioners as buyers through the indenting agents, and railway receipts forwarded to the buyers direct. THE expression "direct" was apparently used in contradistinction to delivery through bank against payment of price. When railway receipts were forwarded direct, that is, whether they were sent direct, or whether they were delivered through indenting agents, it was not against payment of price. THE price was paid later.In paragraph 7 of its order the Tribunal rejected the alternative contentions of the assessee that (1) the bank should be deemed to be a dealer who sold the goods to the petitioners when the bank collected the money and delivered the railway receipts, and (2) the indenting agents must be deemed to have sold the goods to the petitioners when the railway receipts were handed over to the petitioners.