LexMAHADAYAL PREMCHANDRA versus COMMERCIAL TAX OFFICER, CALCUTTA & ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
S.O.R.
SUPREME COURT REPORTS
551
quarters ending on September 30, 1949 ·and December
I958
31, 1949, is reversed and the orders of assessment of
the Sales Tax authorities are restored. Parties to bear SalescTax Ok'ffic:;r,
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B. c. Patel &- Co.
Appeal allowecl in part.
MAHADAYAL PREMCHANDRA
•
v.
C0;\1MEECIAL TAX OFFICEH,, CALCUTTA
& ANOTHEH,
(S. R. DAS c. J., BHAGWATI, s. K. DAS, J. L. KAPUU
and VIVIAN BosE JJ.)
Sales Tax-Sales by Mills in Kanpur to customers in Bengal-
Agent of Mills in Bengal receiving commission on sales, if a dealer
within the definition and liable to sales tax-Turnover of agent, if can
include price of goods sold by Mills-Bengal Finance (Sales Tax)
Act, r94r (Ben. VI of r94r), s. 2(c).
The appellants were commission agents in West Bengal for
certain Mills in Kanpur. They were paid commission once at the
end of each year on all the sales effected by the Mills in Vv'est
Bengal. The orders were placed with the Mills either through
the appellants or 'directly by the customers but goods were sttp-
plied to customers directly and payments were made through
banks. The appellants, except for canvassing business for the
Mills, did not take any part in the sale transactions. The Mills
only maintained a personal account of the appellants in which
the commission was credited. The Commercial Tax Officer was
doubtful of the liability of the appellants to sales tax on these
transactions and referred the matter to the Assistant Collector for
opinion. The Assistant Collector, without giving the appellants
any opportunity to be heard, expressed the opinion that the
appell.ants were liable and directed the Commercial Tax Officer to
do the needful. The latter, thereupon, assessed the appellants to
tax holding them liable for all such sales. The appellants pre:
ferred this appeal by special lea;e :
•
•
S«rkar ].
April r5.
Jl/flhudayal
J>remchaud1 a
v.
C ounnercial Tax
O.flicci, Calcutta
552
SUPH,EME COUH,T H,EPOJtTS
[1959)
Held, that t1ie appellants did not fall wi1bin the definition of
"dealer" ins. 2(c) of the Bengal Finance (Sales Tax) Act, 194r,
and consequently, were not liable to pay sales tax on the disputed
transactions.
Nor could the sale•price of the goods delivered by
the Mills to the customers be included in the gross turnover of
the appellants.
Even though the appellants were commission agents of the
~!ills they had not, in the customary course of business, authority
to sell goods belonging to the principals and as such explanation.
(2) to s. 2(c) of.the Act did not apply. Explanation (3) to s. 2(c)
\\'as al::.o inapplicable as it could not be said that the appellants
carried on the business of selling goods in \Vest Bengal even
though they were the agents of the Mills which resided out side
West Bengal.
The Mills were not ca1rying on any business of
selling goods in \Vest Bengal; they \vere selling goods in l{anpur
and despatching thetn to \Vest Bengal for consun1ption.
As the appcllaHts did not at any time handle the goods of
the disputccl transactions nor receive the price thereof, tlfe sa1e
price could not be included in tltf' gross turnover of the appel-
lants.
.•
The procedure adopted by Sales Tax authorities \Vas unfair
,..
and contrary to the principles of natural justice in tl1at it failed
to afford the appellants any opportunity of being heard and
the order of asscssn1cnt \\'as on that ground alone liable to be
srt aside.
C1nr, APPIDLLATE JuR1SDIGTIO:«: Civil Appeal No.
344 of 1957.
A ppeltl by speei<tl lmwe from the order dated J anu-
ary 15, 1955, of the Commercial Tax Officcr,Calcutta,
in case Xo. 283 of 1952-53 (R. C. Xo. CSI/1630-A).
N. C. Ohatte1jee and S. 0. Jlajumdur, for the appel-
lant.
Ji. N. Sanyal, Additional 801,icito»-General of India,
B. Sen and P. E. Ghose (for P. K. Bose), for the res-
pondents.
H. N. San!Jal, Additional Solic1:tor-General of India,
and R.H. Dhebar, for the Union of India (Inter-
vener).
S. IL Kapur, for the British India Corporation Ltd.,
Kanpur (Intervener).
· 1958. April 15.
The .Judgment of the Court was
dclivored bv
r
•
v
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8.C.H.
SUPHEME COUHT HEPORTS
553
Mahadayal
J>rcmcha11dra
v.
BHAGWATI J.-This appeal with Special Leave is
directed against the order dated January 15, 1955,
passed by the Commercial Tax Officer, Canning Street
(District I) Charge, CalcExcerpt shown. Read the full judgment & AI analysis in Lexace.