INTERNATIONAL PACKAGING INDUSTRIES Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THE only question that arises in this T. R. C. is whether the petitioner, a manufacturer of gunnies, is entitled to claim exemption under section 5 (3) of the Central Sales Tax Act, 1956, in respect of the turnover relating to sale of gunnies in favour of three firms, viz. , M/s. Indian Barytes and Chemicals, M/s. Ramalingeswara Pulverising Mills and M/s. Star Barytes, Cuddapah (Private) Limited. At the relevant time, the export of barytes was canalised and only M. M. T. C. or mine-holders holding lease as on 31st March, 1978, were permitted to export. Even the mine-holders holding lease as on 31st March, 1978, were entitled to export only to the extent of their production and subject to floor-price-mechanism - vide Public Notice No. 16 dated 2nd February, 1979, issued by the Ministry of Commerce, Civil Supplies and Co-operation, Department of Commerce, Government of India. The barytes filled in the gunnies sold by the petitioner was exported by K. Obul Reddy (in the case of gunnies sold to M/s. Indian Barytes and Chemicals), C. M. Ramanatha Reddy (in the case of gunnies sold to M/s. Ramalingeswara Pulverising Mills) and Mohd. Rahamatullah [in the case of gunnies sold to M/s. Star Barytes, Cuddapah (Private) Limited]. The petitioner's claim for exemption was rejected by all the authorities including the Tribunal on the ground that the export was not by the firms/company to whom the petitioner sold the gunnies but by other individuals and presumably there was a sale by the said firms/company to the said individual exporters. This view is challenged by the learned counsel for the petitioner before us.

(2.) IT is argued that since the persons who exported, namely, K. Obul Reddy in the case of M/s. Indian Barytes and Chemicals, C. M. Ramanatha Reddy in the case of M/s. Ramalingeswara Pulverising Mills, are partners of those respective partnership firms, it must be deemed that they exported the barytes as agents of and on behalf of those firms. Similar argument was advanced with respect to Mohd. Rahamatullah vis-a-vis M/s. Star Barytes, Cuddapah (Private) Limited. We find it not possible to agree. Admittedly the gunnies were sold by the petitioner not to the individuals aforesaid but to the two partnership firms and the Private Limited Company referred to above. Now it cannot be presumed that the individuals who exported the barytes did so as agents of or on behalf of the said firms. Merely because K. Obul Reddy was a partner in the firm M/s. Indian Barytes and Chemicals or that C. M. Ramanatha Reddy was a partner in M/s. Ramalingeswara Pulverising Mills, it does not follow that the said firms became the mine-holders. It would not be right to confuse the firm with the partner or to treat them as synonymous in the context. It is not the case of the petitioner that the said firms were the mine-holders nor is there anything to show that the mining rights of the said partners were placed in the firm and made the property of the firm. Moreover, this argument has no relevancy in the case of Mohd. Rahamatullah vis-a-vis M/s. Star Barytes, Cuddapah (Private) Limited. It is a private limited company and not a firm.