KAPUR, J. : - (1.) THE following Judgment of the court wasdelivered by:
(2.) THIS is an appeal against the judgment and order ofthe High court of Mysore in Writ Petition No. 147 of 1958dismissing the appellant's petition under Arts. 226 and 227of the Constitution for quashing the order of assessment forthe period of assessment 1955-56 i.e, from 1/04/1955, to 31/03/1956. In this appeal because of the ValidatingAct (VII of 1956) the appellants did not challenge theirliability for the period 1/04/1955, to 6/09/1955. The facts necessary for the decision of this appeal arethese : Appellant No. 1-The Cement Marketing Co. Ltd-are theSales Managers of the second appellant-The Associated CementCo. Ltd. appointed under an agreement dated 21/04/1954.The High court has described the first appellant to be theDistributors of the second appellant. The second appellantis a manufacturer of cement and at the material time it hadover a dozen factories in different parts of India, none ofwhich was in the State of Mysore. The head office of firstappellant is at Bombay and it had then a branch office atBangalore in the State of Mysore. The first appellant wasregistered as a dealer under the Mysore Sales Tax Act 1948,hereinafter called the 'Mysore Act'. At all material timescement was and still is a controlled article. Whether thesale was to a government Department i.e. to the DirectorGeneral of Supplies and Disposal, government of India, NewDelhi, or to a person authorised by the said Officer or tothe' public it was effected on authorisations given to thebuyers by appropriate government authorities andproduced by them in the office of the first appellant. Bothin regard to purchases by the public and the government theModus operandi was more or less identical. It was thisEvery one wishing to buy cement had to get an authorisationin a standard form which authorised the first appellant tosell cement in quantities mentioned, therein and the cementhad to be supplied from the factory therein mentioned. Thatdocument was in the following form which actually ralates toa sale to a government contractor. JUDGEMENT_980_AIR(SC)_1963Html1.htm This authorisation was subject to the following conditions:It was to be utilised within 15 days; the cement releasedcould be used only for the purpose for which it was given;the authorisation was not transferable; the issuingauthority could, if necessary, revoke the authorisation atany time and even the orders booked under the authorisationcould be cancelled. The purchaser or the indentor had thento place an order with the first appellant as Sales Managersof the second appellant stating the requirement, where thegoods were to be sent and how they were to be sent. Theseller entered into a contract with the first appellant.This contract is in a standard form and gives conditions ofsale. Thereupon the first appellant instructed its Bombayoffice to despatch the cement in accordance with theinstructions of the buyer and the authorisation. In thisletter they had to mention the number of the authorisationand the person who had issued it and also to whom the goodswere to be sent and how and certain other details which arenot necessary for the purposes of this appeal were also tobe given.
(3.) EACH instruction indicates that it was issued for and onbehalf of appellant No. 2 by appellant No. 1 as its SalesManagers. A copy of the letter of instruction was sent tothe factory from where the goods were to be despatched andthe particulars of the authorisation had to be mentionedtherein. Thereafter the first appellant sent an advice tothe purchaser enclosing therewith the Railway Receipt forthe goods and this advice also mentioned the goods werebeing sent. Both the contract of sale and the advice abovementioned stated that the goods were being despatched at thebuyer's risk from the time the delivery was made by thefactory to the carriers and the railway receipt was obtainedfor the goods. In the present case all the goods were sent,as indeed they had to be sent, against the authorisationsfrom the various factories belonging to the second appellantwhich at the relevant time were all situate outside theState of Mysore and were received in the State of Mysore bythe various purchasers. The position of the first appellant is as was accepted bythe Sales tax Officer in his order dated 31/03/1958,that of Sales Managers of the second appellant but in regardto the nature of the transactions the Sales tax Officerfound:-' Though the property in the goods pass to thedealers and consumers outside the Stateimmediately the goods are handed over to thecarriers outside the state and railway receiptis taken out since the goods have actuallybeen delivered In Mysore State as a directresult of such sale for purposes ofconsumption in the State, sale is deemed tohave taken place in Mysore State'.and again he said:-'Thus the sales of cement manufactured byA.C.C. Factories situated outsideMysore .State effected by the dealers M/s.Cement Marketing Company of India Ltd.Bangalore, to dealers and customers in MysoreState amounts to intrastate sales andtherefore liable to Mysore Sales Tax Act 48'.;