INDIAN COFFEE BOARD BATLAGUNDU Vs. STATE OF MADRAS

JUDGEMENT

(1.) THIS application for revision arises out of the assessment proceedings for 1952-53 under the provisions of the Madras General sales Tax Act. The assessment was completed on 31st March, 1954. The petitioner, the Indian Coffee Board, is a statutory body constituted under the provisions of the Coffee Market Expansion Act, VII of 1942. The scope of Act VII of 1942 was explained in Indian Coffee Board v. State of Madras where it was held that despite the statutory composition the board was a dealer as defined by section 2 (b) of the Madras General Sales Tax act, (hereinafter, referred to as the Act ). The learned counsel for the petitioner, however, represented that he was not accepting as correct the decision in Indian Coffee Board v. State of Madras But as a decision of a division Bench of this Court, it is an authority which we are bound to follow. It is on the basis of the liability of the petitioner as a dealer within the meaning of the Act that we shall consider the several heads of assessment, to the inclusion of which in the turnover the petitioner objected unsuccessfully before the Appellate Tribunal. Despite the contention, that the petitioner was not a dealer at all as defined by the Act, the petitioner obtained registration as a dealer under the provisions of the Act.

(2.) THREE items, to the inclusion of which in its taxable turnover the petitioner Board objected, can be considered together. Rs. 6, 14, 510-13-0 represented the total of the amounts the petitioner Board collected by way of tax under the authority of section 8-B of the Act on the sales effected by it. A further sum of Rs. 9, 598-3-3 was collected by the Board from its purchasers to cover any claim that might be made by the department on the basis that the amounts collected by the Board by way of tax were themselves liable to be included in the petitioner's taxable turnover. Rs. 1, 63, 259-12-3 represented the total of the collections made by the Board from its purchasers, which the Board showed in its books as a "contingency deposit. " The nature of these collections was correctly explained by the Appellate Tribunal in paragraph 12 of its judgment :- "it is conceded by the Board that it collected this amount only to cover the tax on certain sale transactions which in its view were not liable to be taxed by the Madras State. It collected this amount in order to safeguard its interests in case it should be decided that these were transactions which are liable to tax under the Madras General Sales Tax act. " *

(3.) IT was this principle that was applied by a Division bench of this Court in Mahalakshmi Textiles Mills v. State of Madras satyanarayana Rao, J. , pointed out :- ". . . . . . . . . the sale and the export which are treated as integrated activities are alone exempt if the sale is the occasion for the export and it commences from the time when the agreement of sale was entered into with the foreign buyer. A purchase anterior to it by the exporter and a sale to the exporter by another person would not be within the limits of integrated activity as defined by the Supreme Court. Both the purchase by the exporter and the sale by the assessee to the exporter who ultimately exports the goods under a sale are beyond the limits and therefore cannot be treated as a sale in the course of export which attracts the exemption. The line has been drawn definitely and clearly by the Supreme Court, and notwithstanding the fact that the goods by virtue of the Cotton Textile (Export Control) Order, 1949, were earmarked by the assessee for the purpose of export and export only, he cannot claim the exemption, for it is not the export alone that entitles him to exemption but the sale in the course of export. IT is that which attracts the exemption, and as in this case the assessee sold the goods to an exporter, he has been rightly held not to be entitled to the exemption by the Appellate tribunal. " *