COMMISSIONER SALES TAX Vs. TATA OIL MILLS

JUDGEMENT

(1.) M /s. Tata Oil Mills Co. Ltd. is the sole selling agent for India in respect of the products of M/s. Tata Chemicals Limited, Bombay, which has a factory at Mithapur in Gujarat for the manufacture of washing soap, soda ash, glycerine, toilet goods, etc. Tata Oil Mills Co. Ltd., Allahabad (hereinafter referred to as the assessee) is a branch office of Tata Oil Mills Co. Ltd., Bombay. The assessment year involved is 1958-59. There is no dispute with regard to the period from 1st April, 1958, to 30th September, 1958. The dispute relates to the period 1st October, 1958, to 31st March, 1959. The turnover for this period is Rs. 6,75,890.17. There is no dispute about the quantum of turnover. The dispute is as to whether the turnover in question represents inter-State sales and whether the assessee is liable to Central sales tax thereon. The assessee's contention is that it acted as the selling agent of the Mithapur Works, Gujarat, (hereinafter referred to as the manufacturers) and the turnover in dispute does not represent inter-State sales. The assessee, therefore, denies its liability for the Central sales tax. The sales tax department, on the other hand, contends that the assessee purchased goods from the manufactures and then sold them to buyers in Uttar Pradesh by transfer of documents while the goods were still in transit from the factory to the various destinations in Uttar Pradesh. According to the department, the assessee is liable to Central sales tax on such sales. The Sales Tax officer did not accept the assessee's contention and levied tax upon it. The assessee did not succeed before the appellate authority but on revision, the revising authority held that the assessee was not liable to Central sales tax. The Commissioner of Sales Tax is aggrieved and has brought this reference for the decision of this court on the following two questions of law :

(2.) THE relationship between the manufacturers and the assessee is governed by written terms and conditions which are embodies in a letter, which the manufacturers wrote to the assessee on 14th May, 1952. These terms and conditions are as follows :

(3.) HIS agreement was operative in the assessment year 1958-59. The working method of the assessee has been set out in an affidavit filed on its behalf before the Sales Tax Officer on 18th February, 1963. The material facts are contained in paragraphs 5, 6, 7, 9, 11 and 13 of the affidavit, which are reproduced below :