- (1.) In these appeals the challenge is to the common judgment of a division bench of the High court at Kerala in tax revision cases.
(2.) On 23/3/1970 the appellant M/s Peninsular Traders (now referred to as "the firm") entered into an agreement with the appellant M/s Indian Rare Earth Ltd. (now referred to as "the company") for the "distributorship of trisodium phosphate". For the Assessment Years 1970-71 to 1973-74 the firm was treated as the agent of the company and assessments were finalised accordingly. On 17/1/1976 the Deputy Commissioner issued notices under Section 35 of the Kerala General Sales Tax Act setting aside the aforesaid assessments and remanding the matters to the assessing authority for fresh assessment upon the basis that the firm was not the agent of the company but the purchaser of the said chemicals from the company. The Kerala Sales Tax Appellate tribunal, approached by the appellants, reversed the order of the Deputy Commissioner. The tax revision cases were filed by the Sales Tax authorities before the High court and the High court, by the judgment and order under challenge, allowed the tax reference cases. Hence these appeals.
(3.) Section 2 (xxi) defines a sale for the purposes of the said Act to mean every transfer, whether in pursuance of a contract or not, of property in goods by one person to another in the course of trade or business, for cash or for deferred payment or other valuable consideration. Explanation 5 thereto states that two independent sales shall be deemed to have taken place when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser.;