Decided on January 16,1998



Girija Jagannath, Member (A) - (1.) THIS is an appeal filed against the orders of the Deputy Commissioner (CT), Chittoor Division in proceedings Re. No. A1/179/88, Dated 6.11.1993, revising the orders of the Commercial Tax Officer -1, Cuddapah, in G.I. No. 420/84 -85 (CST) Dated 3.3.1986. The assessee was originally assessed by the Commercial Tax Officer, on gross and net turnovers of Rs. 2,87,160/ - and Rs. Nil, respectively. The Deputy Commissioner (CT) revised the assessment and brought to tax a net turnover of Rs. 77,03,975/ - @ 10 per cent relating to inter -State sales of turmeric not covered by 'C' forms. On appeal the STAT in T.A. No. 860/85 Dated 26.12.1989 remanded the case for fresh disposal. In the second round of revision proceedings further exemption was allowed on turnover of Rs. 71,98,270/ -leaving a turnover of Rs. 5,05,705/ - taxable at 10 per cent under the C.S.T. Act The appellant is disputing this turnover in the present appeal.
(2.) THE point to be considered is, whether the disputed turnover of Rs. 5,05,705/ - is taxable under the C.S.T. Act. The Deputy Commissioner (CT), has categorised the turnover to be disallowed into three types vide Annexures I to III to his order, which are now discussed along with appellants objections. We shall first take up items in Annexure -III. The first transaction is purchase of turmeric on behalf of non -resident principal M/s. Oatmal Chogaji for Rs. 63,205/ - listed as the No. 3 of Annexure -III. According to the appellant, the non -resident principal directed him to hold the stocks within the State and that such stocks were purchased from local registered dealers and disclosed in the books. Subsequently, the same stock was purchased by one M/s. Ratanchand Ambulal Satna acting through appellant himself as agent, for Rs. 75,311/ -. So, to say, that the appellant in the first transaction acted as buying agent of M/s. Oatmal Chogaji and in the second transaction as his selling agent and as buying agent of M/s. Ratanchand Ambulal Satna. According to the counsel for the appellant, such dual role for the appellant is legally permissible. The first purchase for Rs. 63,205 is not only tax suffered, but the liability thereon was under the APGST Act, and not under the C.S.T. Act. Further, such stocks were purchased and consigned to the nonresident agent M/s. Rathanchand Ambulal and it was an inter -State movement otherwise than by sale. The total of the patti was for Rs. 1,07,021/ - which included the impugned consignment for Rs. 75,311/ -. The revising authority having accepted one item of the patti not dispute the veracity of the agency in respect of only the item for Rs. 75,311/ -. Both the amounts of Rs. 63,205/ - and Rs. 75,311/ - were therefore not taxable under the C.S.T. Act. We find that the revising authority was carried away more with the improbability of the appellant acting in dual capacity. Firstly, as buying agent for one principal and then as agent for a sale by the first principal to the second principal. Legally there is no bar for the same person to act as selling agent on behalf of one principal and as buying agent on behalf of another providing the transactions are substantiated. Counsel for the appellant produced copy of details of relevant patties maintained in a register. He also filed xerox copies of confirmation letters from the principals concerned. In the first transaction, turmeric worth of Rs. 63,205/ - was purchased on behalf of M/s. Oatmal Chogaji, Madras, and held in stock as per his direction. The purchases would therefore become a local purchase. According to the appellant, it was tax suffered. It is therefore not to be taxed under the CST Act. The stocks did not move out of Andhra Pradesh. There is no finding by the Department contrary to those claims. M/s. Ratanchand Ambulal Satna has subsequently confirmed the transactions that took place in 1984 -85 and giving details of commission bills number, date, L.R. number, quantity, purchase value, commission expects and total value. The impugned transaction of purchase of turmeric for Rs. 75,311/ - was part of the total amount of the bill of Rs. 1,07,021/ -. The patty book appears to have been maintained in regular course of business, and so we find no reason to reject the contentions of the appellant and hold that the transaction amounting to Rs. 63,205/ - is not liable under the CST Act as it is a local purchase and the bills for Rs. 75,311/ - was an agency purchase for consignment outside the State otherwise than by way of sale and hence not liable to tax under the CST Act.
(3.) COMING to the third item in Annexure -III for Rs. 90,884/ - it is said to relate to purchases made on behalf of non -resident principal M/s. Harackchand Chogaji, Madras, but stocks were held by the appellant and there was no inter -State movement. These purchases were also made from local registered dealers were tax -suffered and liable only under the A.P.G.S.T. Act. As stocks did not move outside the State, they were not liable under the C.S.T. Act. There is no particular reason given in the revision order taxing the amount of Rs. 90,884/ -. We find the explanation given by the appellant acceptable.;

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