S KRISHNAMACHARI Vs. STATE OF MADRAS

JUDGEMENT

(1.) THE sole point for consideration in this case is, whether the petitioner, who has been assessed to sales tax in respect of commission earned by him under a contract with the Railway Administration, during a period of two years from 1st August, 1958, to 31st July, 1960, is a "dealer" within the meaning of the Madras General Sales Tax Act, 1959. THE petitioner is the Manager of the Swadesamitran Book Stall at the railway station at Tiruchirapalli Junction. Under an agreement with the Railway Administration, he undertook to vend on the station platform and along the train side, food packets, refreshments and beverages prepared by the Administration at the vegetarian refreshment room. He was allowed for the purpose, the use of the vessels, utensils, furniture, stores, etc., belonging to the Administration and was to be paid at the end of each day twelve naye Paise per rupee on the value of edibles or beverages etc., supplied to him. THE petitioner should employ his own servants for the vending, but they should possess the specified attributes and submit themselves to periodical medical examination and character investigation by the Administration. If the latter were to consider any servant employed by the petitioner as in any way unfit or had misconducted himself, the petitioner was bound to dismiss him. THE petitioner had no right to assign his rights or privileges under the agreement. Notwithstanding the agreement, it was open to the Administration to sell the food packets, refreshments and beverages in its refreshment room, stalls, and on the platforms and they could also serve in the train compartments. But there was no corresponding liberty to the petitioner he was to sell the edibles and drinks, a prepared by the catering department of the Administration, at specified places and during the hours when the Refreshment Room was working, at price fixed by it. He was to be supplied his daily requirements and he was bound to remit

(2.) THERE were stipulations as to the furnishing of security by the petitioner, for his and his servants' orderly conduct, for forfeiture of security and termination of the agreement. Clause 17 of the agreement stated that the petitioner was liable to pay, at the sole discretion of the Administration, a fine not exceeding Rs. 100 for complaints, which, in its opinion, had been substantiated against him, in the matter of the sale of the articles. Clause 21 required that the petitioner and his servants should carry our the instructions given by the authorised officials of the Administration in the day to day performance of the agreement.These pervasions indicate that there was a great degree of control and direction by the Administration in respect of the manner in which the food packets etc. were to be sold by the petitioner to the railway passengers.

(3.) THE Tribunal sustained that view it also held that the petitioner would be liable to be assessed on the turnover even as an agent. We are, however, unable to accept the conclusion. THEre is very little material in the case to show that there was a sale of the food-stuffs to the petitioner the agreement was for a specific purpose, namely, that of vending on the platform the articles prepared by the refreshment room. A sale implies that the vendor will be an independent contractor, that is, one who is not subject to the control of the vendee after the purchase has been md. It is true that the agreement may stipulate certain conditions but the petitioner should have complete discretion in things not specified in the agreement. Here, we find that the petitioner was bound to obey such instructions as the Railway Officials might given in the day to day performance of the agreement. Secondly, there is a power in the Railway Administration to punish the petitioner for misconduct by imposing a fine up to a limit of Rs. 100. That is quite inconsistent with the relationship of a vendor and vendee.THE Appellate Tribunal found in favour of such relationship on a curious line of reasoning and by adopting an unsatisfactory procedure. It has stated :