COMMISSIONER OF SALES TAX Vs. METAL DISTRIBUTORS LTD

JUDGEMENT

(1.) THIS is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as 'the said Act'), made at the instance of the Commissioner of Sales Tax. The question which has been referred to us for our determination is as follows : 'Whether, on the facts and in the circumstances of the case and having regard to the true interpretation of the contract between the respondent and M/s. Morarjee Raisey & Co. for the supply of electrolytic copper ingot bars embodied in the respondent's letter dated 15th February, 1963, which was also signed by M/s. Morarjee Raisey & Co. in confirmation, the Tribunal was justified in law in holding that the transaction was not a sale but was a transaction of agency not liable to tax under the provisions of the Bombay Sales Tax Act, 1959 ?'

(2.) THE facts giving rise to this reference are as follows : M/s. Morarjee Raisey and Co. (hereinafter referred to as 'M.R. and Co.') were the holders of an import licence known as actual user's import licence bearing No. 183273 for the import of electrolytic copper ingot bars. On 15th December, 1962, a letter of authority was issued by the officer of the Joint Chief Controller of Imports and Exports, whereby M.R. and Co., as the holders of the aforesaid licence, were authorised to permit the respondent, viz., Metal Distributors Ltd., on their behalf to import goods and open letter or letters of credit and make remittance of foreign exchange against the said import licence. The relevant conditions in this letter of authority are as follows :

(3.) BY their letter dated 17th February, 1963, addressed to the respondents, Metal Distributors (U.K.) Ltd., an English company, (hereinafter referred to as 'the foreign company') confirmed having sold to the respondent, subject to the terms and conditions shown on the reverse of the said letter, 2.60 long tons of electrolytic copper ingot bars. The price is mentioned in this letter as pounds 239 -5 -0 per long ton c.i.f. The term relating to payment shows that payment was to be made by cash against first presentation of documents. This letter contains a statement that the buyers hold import licences of which the numbers are set out in the letter. One of the licence numbers mentioned is 183273, viz., the number of the said import licence issued to M.R. and Co., which we have already referred to earlier. The general conditions on the reverse of this document, which are in print, contain the usual force majeure clause. The is also a clause stating that buyers undertake to supply, as the sellers may require, one or all of the following valid documents, viz., import licence, import certificate, end use certificate, delivery verification certificate. There is a further clause providing for arbitration in case of any difference or dispute arising out of the contract. There is also a condition providing that unless otherwise agreed and recorded on the contract the sellers would cover marine and war risk insurance on the basis stated therein. There is a condition relating to price basis, but it is not necessary to set out the same, as no argument has been advanced based therein.