DEPUTY COMMISSIONER OF COMMERCIAL TAXES COIMBATORE Vs. ALLIED TAXTILE CORPORATION MILLS STORES COIMBATORE

JUDGEMENT

(1.) THE respondents are dealers in "mill stores" at Coimbatore. THEy were assessed by the Joint Commercial Tax Officer, Coimbatore, under the Madras General Sales Tax Act, 1939, for the year 1958-59 on a turnover of Rs. 2, 68, 000 and odd. Out of this, an amount of Rs. 56, 300 and odd was assessed as representing sales in the course of business of the petitioners (sic). THE respondents objected to the inclusion of this turnover in the assessment on the ground that they covered what they described as "accommodation sales". THE respondents having failed before the Joint Commercial Tax Officer, preferred an appeal to the Appellate Authority, but again failed. On a further appeal to the Tribunal, the respondents succeeded. THE Tribunal held that the turnover of Rs. 56, 300 represents accommodation sales and the petitioners were entitled to have this excluded from the taxable turnover. THE State of Madras has preferred this revision petition against the said order of the Tribunal.

(2.) THE only question that arises for consideration in this revision petition is whether the sale value of Rs. 56, 300 included in the assessees' turnover, can be excluded on the ground that it represented accommodation sales, in respect of which there are provisions in the statute and the rules. THE assessees' case is that they were dealers only in mill stores, but in order to oblige their customer, a company called S.R.C. Mills Ltd., Tiruppur, they purchased plates and angles from a Bombay dealer and supplied them to the mills. THEy submitted that they did not make any profit in respect of this transaction, that they merely obliged S.R.C. Mills Ltd., by placing an order with the Bombay dealer and by getting the goods from Bombay to Coimbatore.We shall at first refer to the provisions of the Act. It is clear that the assessees must establish that the turnover in respect of these sales, which apparently is in respect of transaction of sales, is not liable to be taxed. Section 2(i), Explanation I(iv), deals with accommodation transaction. Section 2(i) defines "turnover" and the explanation reads :

(3.) THE first consignment was cleared on 10th March 1958, and the second consignment on the 16th April, 1958. But actually the assessees submitted their invoice to the mills only on 31st May, 1958. THE Tribunal went into the question as to when exactly the goods were cleared as there was an interval of about a month between the clearing of the second consignment and the actual date of the invoice. It appears that the mills required these materials - plates and angles - for constructions of premises and their contractor was one Nirmala Engineering Works. THE consignments appear to have been actually cleared by these engineers on behalf of the mills. A letter written by the engineers to the assessees in the following terms was placed before the Tribunal.