STATE OF MADHYA PRADESH Vs. DAYARAM RATHOD

JUDGEMENT

(1.) THIS order shall also govern Miscellaneous Civil Case No. 306 of 1957.

(2.) THESE are two references by the Board of Revenue, Madhya Pradesh, under Section 23 (1) of the Madhya Pradesh Sales Tax Act, 1947. They arise out of orders of assessment to sales tax on the assessee Dayaram Rathod for the period from 22nd October, 1949, to 9th November, 1950, (Miscellaneous Civil Case No. 306 of 1957) and for the period from 10th November, 1950, to 30th October, 1951, (Miscellaneous Civil Case No. 305 of 1957 ). The questions referred to for the opinion of this Court in the two references are identical. They are, namely:

(3.) THE material facts are that the assessee who does business in the name and style of 'indian Mill Stores" was by an agreement dated 10th September, 1952, appointed by the Gulf Oil (India) Limited, Calcutta, as its distributor for selling the goods of the Gulf Company in the districts of Raipur, Durg, Bilaspur, Raigarh and other districts. By Clause 1 of the agreement the company granted to the assessee the privilege of selling its goods in the districts mentioned above. By Clause 2 it was provided that the company would sell the distributor and the distributor would buy from the company the products at the prices established by the company in the territory concerned as on the date his order was accepted by the company and the distributor would sell to his customers on his own responsibility without rendering the company responsible or liable in any manner in respect of any sale made by him to his customers. The selling price of the distributor to his customers had to be fixed by mutual agreement from time to time. If there was no agreement for any reason, then the selling price of the distributor was not to exceed more than 20 per cent, of the company's selling price to him. Clause 4 of the agreement on which the asseseee mainly relies is an important one and it is necessary to set it out in extenso. It is as follows :