COMMISSIONER OF SALES TAX Vs. K C MOHAPATRA

JUDGEMENT

(1.) THE following question has been referred to this Court under section 24(3) of the Orissa. Sales Tax Act, by the Member, Sales Tax Tribunal, Orissa, in pursuance of a direction given by this Court under section 24(2) of that Act :-

(2.) THE Government Handloom Textile Marketing Organization is a concern run on a commercial basis by the Government of Orissa, with its headquarters at Cuttack. Its business is to sell handloom products produced at various centres in Orissa. The opposite party K. C. Mohapatra (hereinafter referred to as the assessee) is the proprietor of a shop known as Lakshmi House near Lion's Gate in Puri town. He carried on his own independent, business of selling various kinds of textile goods and he was registered as a "dealer" and used to pay sales tax in respect of those sales.

(3.) THE material facts found by the Tribunal are as follows :- The Textile Marketing Organization used to supply the goods in question to the assessee from time to time. That Organization maintained a separate personal ledger account in the name of the assessee in which the goods supplied to him and the moneys received by him, were debited and credited. The cash memos of the Textile Marketing Organization were also supplied to the assessee who used to issue them to the various purchasers of the goods from his shop known as Lakshmi House. But the labels of the Textile Marketing Organization, pasted on the goods, were taken out by him and he affixed his own labels, describing himself as "Lakshmi House, agent of the Textile Marketing Organization". The sale prices actually received by the assessee from the various purchasers were remitted by him at regular intervals to the Textile Marketing Organization who used to send a supervisor periodically to verify the stock of goods in the assessee's possession and report about the same. After annual audit the assessee was given 5 per cent. commission on the total sales effected by him, on behalf of the Textile Marketing Organization. In the affidavit filed by the assessee before this Court on the 10th October, 1961, it is admitted that this commission covered not only his remuneration as an agent but also actual expenses incurred by him towards payment of house rent, lighting charges, etc., for that portion of the assessee's shop where the goods of the Textile Marketing Organization were stocked and sold. It further appears from the order of the Assistant Collector of Sales Tax that a copy of the written agreement between the parties was kept in the assessment record, but that was not taken into consideration by him. Before the Additional Member, Sales Tax Tribunal, also, neither party relied on the terms of the agreement with a view to ascertain the precise nature of the relationship between the assessee and the Textile Marketing Organization.