STATE OF TAMIL NADU Vs. SRI RAJALAKSHMI INDUSTRIES

JUDGEMENT

(1.) THIS tax case revision petition has been filed against the order of the Tribunal, dated September 3, 1991, made in Tribunal Appeal No. 1085 of 1990 for the assessment year 1985 -86 by contending that the Tribunal grossly erred in its conclusion that the Revenue has not established even on a single case that the assessee has handled the goods. The finding of the Tribunal that the Revenue failed to prove that the assessee has received the goods from the sellers and then sold them to the intending purchasers is factually incorrect.

(2.) THE facts : The assessee was a dealer in stainless steel utensils having its place of business at No. 119, Sri P.S. Sivasamy Salai, Madras. The place of business of one Tvl. V.P. Palanichamy Nadar & Co., Thanjavur was inspected by the Inspecting Officers on December 13, 1985. During the search, the inspecting officers recovered the demand draft, order forms and letter book containing copies of letters from one Thiru D. Raju, S/o. R. Damodharan. The said Raju is stated to be the son of R. Damodharan, who is the owner of Rajalakshmi Industries. On the basis of the record, the assessing officer has determined the suppression in a sum of Rs. 6,79,297 in the case of the assessee and levied surcharge, additional surcharge and additional tax in addition to the penalty in a sum of Rs. 1,19,217. The Appellate Assistant Commissioner on appeal at the instance of the assessee sustained the assessment and reduced the penalty and fixed it to Rs. 79,479. The assessee further filed an appeal to the Tribunal. The Tribunal allowed the appeal in its entirety and held in favour of the assessee. The correctness of the same is canvassed before us.

(3.) IT is the case of the assessee that after the assessment year 1982 -83, they were only acting as an agent on commission basis. They acted as agent to Bombay principals as well as the local principals. The assessee booked orders and forwarded the same to the principal for execution. The principals would directly supply the goods to the customers and sometimes the copy of the bills were sent to the assessee for collection of the sale price. The assessee was entitled to sale commission for the orders booked and the assessee never handled the goods and the assessee's principals raised bills and paid the local taxes under the Central Sales Tax Act, wherever applicable. The documents unearthed at the time of the inspection of Tvl. V.P. Palanichamy Nadar & Co., premises, i.e., the demand draft and the order forms and letter book ipso facto cannot be regarded as one establishing the fact that the assessee has handled the goods and sold the ultimate customer by raising sale bills or invoices. The goods have never reached the assessee. The ultimate fact -finding authority, the Tribunal after analysis of the facts and the evidence adduced, has come to the conclusion that the Revenue has not established even a single case that the appellant has ever handled the goods of any of the transaction. The Revenue miserably failed to prove that the assessee has received the goods from the seller and in turn sold them to the intending purchasers, but there are volumes of evidence to prove that the assessee has procured order forms from various customers and placed the same before their principals and the principals have dispatched the goods directly to the persons, who placed orders with the assessee. The assessee has obtained only a sales commission. As already stated in certain case, the assessee has collected the money from the purchasers and sent it to the principal by way of demand drafts. This per se cannot be regarded a local sales/inter - State sales effected by the assessee in the absence of any other factor or any other materials supporting the case of the Revenue that the assessee has transacted the local sales or inter -State sales by himself. On the basis of the materials adduced to establish that the assessee has acted only as a commission agent, the Tribunal has in our view rightly come to the conclusion that the order of the assessing officer as well as the appellate authority in so far as sustaining the levy of suppression and the other component is not in consonance with the statutory requirement.