SHRIGOPAL RAMESHWARDAS Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS is a reference under Section 23 (1) of the M. P. Sales Tax Act by the Board of Revenue referring the following question for the opinion of this Court: Under the facts and circumstances of the case, could the despatches of oilseeds of the value of Rs. 2,64,386 made by the applicant to places outside the Province during the assessment period 13th November, 1947, to 31st October, 1948, constitute 'sale' taxable under the Sales Tax Act ? The assessment period is before the commencement of the present Constitution and is governed by the Government of India Act, 1935. The question involves the application of Explanation (II) to Section 2 (g) of the Sales Tax Act, 1947. The facts of the case are as follows.

(2.) THE assessee employs pucca adatiyas including Ramdas Manohardas, Khadakpore, for the purpose of arranging sales of linseed and other oilseeds and food-grains which he despatches from Jabalpur to Khadakpore and other places outside the State. During the assessment year he sent various consignments to the pucca adatiya which were disposed of by the adatiya. The Board of Revenue in its statement of the case has given one typical example of how the transactions go through. In that example a consignment of 388 bags of sarso was despatched on 18th December, 1947, from Howbagh to Khadakpore. On 29th December, 1947, a bijak was sent by the pucca adatiya to the assessee giving the details of the price and expenses, commission etc. showing a net balance of Rs. 21,368-2-9 as due to the assessee. Under the same date the assessee made a corresponding entry in the nakal bahi and debited Ramdas Manohardas, Khadakpore, with the amount of Rs. 21,368-2-9. The Board of Revenue held that this sale must have been made at a time when the commodity was within this State. The Board of Revenue distinguished an earlier decision of the Board reported in Hirji Govindji v. The State [1952] 3 S. T. C. 263 (Ruling No. 7) on the ground that in that case documents had been produced to show that the sale had taken place after the goods had left the Province. The learned President held that the bijak and the nakal entry taken together did not show that the transaction of sale took place on 29th December, 1947, or at a time when the goods had left the Province and, therefore, the Board presumed that the sale with the adatiya took place when the goods were within the Province. The question that arises is whether there was any material on which the Board could reach the conclusion that the sale transaction took place when the goods were within the Province.

(3.) TO begin with, a pucca adatiya does not always purchase the goods himself. He finds customers for the goods and sells the goods to them. The difference between a pucca adatiya and a kachcha adatiya is well known and has been brought out by Chandavarkar, J. , in the leading case reported in Kanji Devji v. Bhagvandas Narotamdas 7 Bom. L. R. 57. A pucca adatiya can adopt the transaction to himself if he so cares, but ordinarily he finds a customer for the goods, though the two principals are nof disclosed to each other, and the transaction is between the adatiya and the two principals on either end. When goods are sent to a pucca adatiya, there may be no sale to him. The sale to him comes into existence only if he appropriates the transaction for himself. If the pucca adatiya finds a customer there are no two sales, namely, one to the pucca adatiya and another to the buying principal. There is only one sale and that is to an undisclosed principal through the agency of the pucca adatiya.