LAWS(ALL)-1963-5-11

THAKUR DAS HUKUM CHAND Vs. COMMISSIONER SALES TAX

Decided On May 07, 1963
THAKUR DAS HUKUM CHAND Appellant
V/S
COMMISSIONER, SALES TAX Respondents

JUDGEMENT

(1.) The Judge (Revisions) has submitted to this Court, at the instance of an assessee, a statement of the case raising the following questions:

(2.) The assessee is a commission agent-kachcha arhatia-and arranges sale or purchase of foodgrains, oil seeds etc. It arranges sale on behalf of sellers (and purchase on behalf of purchasers) ; itself does not do any act of selling. For its labour in arranging sale it charges commission from the seller and the buyer both. It also sells goods on its own account as a dealer. It obtained a licence as a commission agent on 26th November, 1949. It maintains accounts only of the business carried on by it as a dealer, according to which it sold oil seeds of the turnover of Rs. 2,903-4-6 and foodgrains etc. of the turnover of Rs. 9,038-6-3. It did not maintain any accounts of the transactions carried on by it as a commission agent, but only noted the commission charges received by it. The total amount of commission received by it during the assessment year was Rs. 3,850. The rate of its commission was 1% and, therefore, the turnover worked out at Rs. 3,85,000. The Sales Tax Officer estimated that Rs. 96,000, approximately one-fourth of the total turnover, was the turnover of oil seeds and split up this amount into two amounts, one of Rs. 20,000 as representing the turnover for the period 1st April, 1949, to 25th November, 1949, and the balance as representing the turnover for the remaining period 26th November, 1949 (the date on which it obtained a licence as a commission agent) to 31st March, 1950. He then assessed it on the total of Rs. 20,000 and Rs. 2,903-4-6 its admitted turnover as a dealer. The assessee filed an appeal contesting its liability to pay sales tax on the amount of Rs. 20,000 on the ground that it did not buy and sell goods, but only arranged transactions between sellers and buyers and that for the period up to 25th November, 1949, it could not be taxed but could only be charged licence fee. The Judge (Appeals) dismissed the appeal holding that the applicant was a pakka arhatia and not a kachcha arhatia. It then filed an application in revision raising the same contentions and the contention that even if it was a pakka arhatia it was not a dealer within the definition in the Act. The Judge (Revisions) dismissed the revision application. He held that the assessee received goods from sellers on payment of price and subsequently sold them to buyers, who made payment to it, that buyers paid the same price as was paid by it to sellers, that the date on which it sold to buyers was generally different from the date on which it received from sellers, that it charged commission from sellers as well as buyers and that there were no direct transactions between sellers and buyers. So he confirmed the Sales Tax Officer's finding that it was a pakka arhatia buying goods and then selling them. He further held that when the assessee failed to obtain a licence it was liable to pay tax on the turnover as a dealer and that even as a commission agent it came within the definition of "dealer", because it actually sold goods in the course of its business. In the result he dismissed the revision application. The assessee applied under Section 11(1) for stating a case to this Court, but the application was rejected. Then this Court, at its instance, directed him to state the case. While stating the case he called for a report from the Sales Tax Officer on certain matters ; he had no jurisdiction to do so. He had to state the case on the basis of whatever was found, or accepted as true, by him when disposing of the revision application and could not make any further enquiry or re-decide the revision application. Consequently what he incorporated in the statement of the case on the basis of the report submitted to him by the Sales Tax Officer will be completely left out of consideration. The questions formulated by him in the statement of the case are reproduced above.

(3.) The assessee admittedly is a commission agent and the question is whether it is a kachcha arhatia or a pakka arhatia. It cLalmed to be a kachcha arhatia, whereas it has been assessed as a pakka arhatia, and the first question is whether there was any evidence in support of the finding that it is a pakka arhatia. It has been found that it records transactions carried on by it as a commission agent as if it purchased goods from sellers and then sold them as its own goods to buyers. It pays sellers the price of the goods and receives from buyers their price. Selling goods is not simultaneous with receiving them. These facts can legally support the finding that it buys and then sells goods and does not merely bring buyers into contact with sellers and arrange transactions between them. It may be that it receives from buyers what it pays to sellers and that it receives commission from buyers and sellers both ; these facts might show that it acts only as an agent bringing buyers and sellers into contact with each other and promoting direct transactions between them, but question No. (1) is whether there is any material to support the finding that it acts as a pakka arhatia and not whether there is any material to show that it acts as a kachcha arhatia. The question whether there is any material to support a finding does not include the question whether there is any material to support the contrary finding. If there is material to support a finding, the finding can be given even though there is rebutting material, or material indicating the contrary. If a finding is given on the basis of material that would sustain it, even though there is contradictory or rebutting material, no question of law arises. My answer to the first question is "Yes".