PROVINCIAL GOVERNMENT OF MADRAS Vs. MUDUKURU MUNIRATHNAM CHETTI

JUDGEMENT

(1.) THE only question in this case is whether the respondents are liable to pay sales tax under the Madras General Sales Tax Act, 1939 as dealers in, i.e., as purchasers and sellers of groundnuts. THE suit was for the recovery of Rs. 3, 181-3-4 being the tax collected from them. THE learned Subordinate Judge dismissed their suit, but on appeal the learned District Judge had decreed it. THE Government is the appellant before me.

(2.) THE finding of the learned District Judge on a careful consideration of the entire evidence on the record as regards the nature of the transactions in respect of which the plaintiffs are sought to be made liable for sales tax is as follows : THE plaintiffs advance moneys to owners of groundnuts and enter the loans in the respective ledger folios of the customers. When the owners bring their stock of groundnuts, the plaintiffs allow them to be stocked in their godown, dry them, debiting the drying charges to the owners, and decorticate them in the decorticating machine which the plaintiffs own and debit the owners the decorticating charges. THEy then sell the groundnuts kernels to firms like Rally Bros. and Louis Dreyfus & Co., and others. THE sale proceeds when received are credited to the respective owners of the groundnuts.