GAMMIES PRIVATE LIMITED Vs. GOVERNMENT OF MADRAS

JUDGEMENT

(1.) THE question raised in this revision petition is whether the petitioners, who are dealers in telephone insulators and parts and accessories, are liable to pay sales tax on a turnover of Rs. 30, 537. THEy contended that the turnover did not arise out of any independent sale effected by them apart from the sale of the goods to the Madras State Electricity Board through the medium of a concern called the Eastern Electric Company, that that transaction had already been subject to tax, that the amount of tax so levied had been collected and that therefore another levy cannot be made against them. THE department did not accept this contention and assessed the turnover to tax. THE petitioners' appeal to the Sales Tax Appellate Tribunal also failed and hence this revision petition.

(2.) THE way in which the petitioners sought to save themselves from the levy of tax before the Department and the Tribunal was to contend that Messrs Eastern Electric Company was their selling agents, that they actually sold the goods to the Madras State Electricity Board and that the turnover relating to that sale has been subject to tax which has been paid by the petitioners through Messrs Eastern Electric Company. It has however been held by the Tribunal that the facts of the case would not warrant the Eastern Electric Company being treated as the selling agents of the petitioners. This conclusion is very largely based upon the correspondence between the petitioners and the Eastern Electric Company. It is not in dispute that the Eastern Electric Company entered into a contract with the Madras State Electricity Board to supply 2, 000 dozens L.T. Shackle insulators.

(3.) "We agree to purchase the 2, 000 dozens L.T. Shackle insulators along with the relative metal parts ........ It is agreed between us that you should deliver the materials to the Central Stores at 56, Basin Bridge Road, Madras, free of charge. We agree to give you an advance of Rs. 10, 000 against the above supply. The balance will be paid on your completing the supply and payment received by us from Electricity Department. The rejection made by the department will be to your account. It is understood that the materials are to be these satisfaction of the department ........ Regarding sales tax, we shall arrange to collect it from the Government and pay it to the Sales Tax Authorities on your behalf. In case we are also asked to pay the sales tax the responsibility for meeting the same will be to your account since you are certain that the sales tax is only at one point."