STATE OF MADRAS Vs. INDIAN COFFEE BOARD BATLAGUNDU

JUDGEMENT

(1.) THE turnover of which the liability to tax under the madras General Sales Tax Act was in dispute, was Rs. 53, 341-14-0. THE findings of the Tribunal were : Messrs Polson Ltd. , Bombay , was the buyer. THE transaction was put through a commission agent who was authorised by Messrs. Polsons Ltd. , as one of the registered wholesalers possessing a permit to bid at the coffee pool auction. Messrs. Polsons appointed the firm of Messrs. Ullal Deva Rau and Sons, commission agents of Mangalore, to function as the purchasing agents for coffee for Messrs. Polsons Ltd. THE authorisation by Polsons Ltd. , enabling Messrs. Ullal Deva Rau and Sons to bid at the auction was accepted by the Indian Coffee board. In pursuance of this, Messrs. Ullal Deva Rau and sons, as commission agents bid at the coffee pool auction on behalf of Messrs. Polsons Ltd. THEy took delivery of the goods. It is not denied that the goods were subsequently sent by the commission agents to Messrs. Polsons Ltd. , Bombay .

(2.) THE Tribunal was of the view that the sales had been effected in the course of inter-State trade, and that the assessee, the Indian coffee Board, was entitled to the immunity from taxation guaranteed by Article 286 (2) of the Constitution. It was the correctness of that decision that the government challenged by their application for revision under section 12-B of the Act. It was on the observations of the Supreme Court in THE state of Travancore-Cochin v. S. V. C. Factory), that the Tribunal relied to hold that the sales in question were not liable to taxation under the Act. THE learned Judges of the Supreme Court observed : "the contention on behalf of the State was that though the purchases were made outside the State in the neighbouring districts of Madras , deliveries were effected through the ordinary commercial channels by employing commission agents who made the purchases and arranged for the deliveries at the respondents'depots at Trichur or Quilon. . . . . . If, as claimed by the advocate-General, the purchases were effected by the employment of firms doing business as commission agents outside the State, and the deliveries were made through normal commercial channels, the transactions would partake of an inter-State character and fall under clause (2 ). " *