J MOOSA DEVANDEVIDI Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) Jaganmohan Reddy, C.J.-The petitioner in both the petitions is a firm carrying on business of auctioneers. They auction at their auction hall articles which are entrusted to them by various persons, and in accordance with their directions. The Commercial Tax Officer issued a notice to the petitioner on 6th December, 1965, proposing to assess the firm as a dealer. Against this, a Wirt Petition No. 1951 of 1965 for the issue of a Writ of Prohibition, challenging the jurisdiction of the authority to assess the petitioner, was filed. It was admitted on 14th December, 1964, and interim stay was granted. The said stay order was also, according to the petitioner, communicated to the 1st respondent on 15th December, 1965, but nonetheless the order of assessment purporting to have been passed on 13th December, 1965, was served on the petitioner on 18th December, 1965. The Petitioner then had to file W.P. No. 1989 of 1965 to quash the order, It has also filed another writ petition because the 1st respondent commenced proceedings for 1965-66. Inasmuch as the Writ Petition No. 1951 of 1965 for the issue of a writ of prohibition had become infructuous, we dismissed it.

(2.) In these two writ petitions, the questions that arise for consideration, are whether the petitioner is a dealer within the meaning of the Andhra Pradesh General Sales Tax Act and whether the firm is liable to be assessed having regard to the fact that ncne of the principals, i.e., the owners who had entrusted the articles to the auctioneer have a taxable turnover.

(3.) It is contended by Sri AnanthaBabu, firstly that the Legislatures have power to tax only transactions which amount to sales as defined in the Sale cf Goods Act, and have no power to extend their jurisdiction by artificial definition of ' sale ' or by laying down legal fictions. The power to tax a sale, according to him, comprehends the power to tax either party to the transaction, i.e., the seller and the buyer, and even as the law posits the existence, as a condition precedent to the levy of tax of an intimate nexus between the transaction and the State, which seeks to tax the transaction, so also it is essential that there should be an adequate nexus between the transaction and the person made liable to pay the tax levied on the transaction.