PETITIONER: THE STATE OF BOMBAY Vs. RESPONDENT: M/S. RATILAL VADILAL AND BROS. DATE OF JUDGMENT: 15/11/1960 BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. KAPUR, J.L. SHAH, J.C. CITATION: 1961 AIR 1106 1961 SCR (2) 367 CITATOR INFO : D 1962 SC1326 (4) R 1973 SC 804 (11) ACT: Sales Tax--'Dealer'--Meaning of--Appeal by special leave--When available--Bombay Sales Tax Act, 1953 (Bom. III of 1953), ss. 27(1), (b), (c), 30(1), 34(1) and (2)--Constitution of India, Art. 136. HEADNOTE: One Nanalal Karsandas, who was a brick manufacturer, held a priority certificate for purchasing coal under the Colliery Control Order and purchased a certain quantity of coal from M/s. S. G. Rungta Colliery through the respondents who were commission agents. The respondents applied to the Collector for determining whether they could be described as "dealers" under the Bombay Sales Tax Act, 1953. The Collector held that they were dealers but the Sales Tax Tribunal held otherwise. No step was taken thereafter for a reference to the High 368 Court under ss. 34(1) and 30(1) of the Act. On appeal by the State of Bombay by special leave, Held, that the respondents could not be described as "dealers" under the Act as the nature of their business as disclosed by them did not show that they were carrying on the business of selling goods in the State of Bombay but were only commission agents arranging sales to other persons. The proper course for the appellant was to move the High Court and exhaust all his remedies before invoking the jurisdiction of this court under Art. 136 of the Constitution. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 429 of 1959.
Appeal by special leave from the judgment and order dated
December 6, 1957 of the former Bombay Sales Tax Tribunal in
Appeal No.6 of 1956.
C. K. Daphtary, Solicitor-General of India, H. R. Khanna
and R. H. Dhebar, for the appellant.
N. A. Palkhivala, S. P. Mehta, J. B. Dadachanji, Rameshwar
Nath and P. L. Vohra, for the respondents.
1960. November 15. The Judgment of the Court was delivered
by
HIDAYATULLAH, J.-The State of Bombay has appealed to this
Court with special leave, against an order of the Sales Tax
Tribunal, Bombay, dated December 6, 1957, by which the
Tribunal allowing the appeal before it, set aside an order
of the Collector of Sales Tax passed under s. 27 of the
Bombay Sales Tax Act, 1953.
The respondents, Ratilal Vadilal & Bros., are commission
agents doing business as clearing and transport contractors.
On June 25, 1954, they applied to the Collector of Sales
Tax, Bombay, under ss. 27(a), (b) and (c) of the Act
describing the nature of their business, citing one instance
thereof, for determination of the question whether they
could be called “dealers ” within the Act. The Collector by
his order held that they were dealers, and were required to
register themselves under the Act. On appeal, the Tribunal
held otherwise, and hence this appeal by the State of
Bombay.
369
It appears that no action was taken to ask for ‘a reference
to the High Court of Bombay under s. 34(1) read with ss.
30(1) and (2) of the Act. We have frequently noticed that
all the remedies which are open to an appellant are not
first exhausted before moving this Court. Ordinarily, this
Court will not allow the High Court to be bypassed in this
manner, and the proper course for an appellant is to exhaust
all his remedies before invoking the jurisdiction of this
Court under Art. 136. In the present case, however, the
matter is simple, and the learned counsel for the respondent
requested us to determine the question, stating that his
client who was a small trader and who made the application
for the clarification of the law, would be dragged through
Courts once again, if we were to decide this appeal on this
short point. In view of this, though we decide this appeal,
we must not be held to lay down a cursus curiae for this
Court.
The matter relates to a time after the Colliery Control
Order, 1945, came into force. Under that Order, no person
could acquire or purchase coal from a colliery except under
authority of the Central Government for which purpose he had
to obtain a priority certificate from the State Coal
Controller. Under the scheme of the Order, del credere
agents were allowed to act and to charge a commission of one
rupee per ton of coal.
One Nanalal Karsandas, a brick manufacturer, was allotted a
priority certificate in respect of 22 tons of coal on June
17, 1954. He dealt with M/s. S.C. Rungta Colliery, Burhar,
through the respondents. The consignment was in the name of
Karsandas, but the bill was sent by the Colliery to the
respondents, and the respondents, in their turn, made out a
bill in which they charged, in addition to the amount of the
bill of the Colliery, a sum of Rs. 22 as their commission.
The liability to pay the Colliery rested upon the
respondents, but they claimed to be acting as mere
“middlemen ” between the Colliery and Karsandas. The
respondents stated that their business was along these lines
with other constituents also, and asked the Collector to
determine whether they could be described as “dealers”
within the Act, and required registration.
370
“Dealer ” in the Bombay Sales Tax Act, 1953, is defined as
follows:
“dealer ” means any person who carries on the business of
selling goods in the State of Bombay, whether for
commission, remuneration or otherwise…” (Explanation
omitted).
It would appear that to be a dealer, the person must carry
on the business of selling goods in the State of Bombay.
The short question in this case, therefore, was whether the
respondents were carrying on such a business in respect of
coal.
The scheme of the Control Order shows that no sale of coal
could take place except to a person holding a certificate.
A sale otherwise was in contravention of the Control Order.
The certificate which has been produced in the case, though
made out in the name of the respondents, shows the consumer
as the consignee. It is thus plain that there was no sale
by the Colliery to the respondents, but directly to Karsan-
das, though through the agency of the respondents. The
respondents also, when they made out the bill to Karsandas,
mentioned that he was the consignee, and that they were only
charging their ” middlemen ” commission. In these
circumstances, it is difficult to hold that the Colliery
sold coal to the respondents, and that they, in turn, sold
it to Karsandas. There were no two sales involved; there
was only one sale, and that was by the Colliery to the
consumer. The respondents never became owners by purchase
from the Colliery, because the Colliery would not have sold
coal to them, nor could they have bought it unless they had
obtained a certificate. The position of the respondents was
merely that of agents, arranging the sale to a disclosed
purchaser, though guaranteeing payment to the Colliery on
behalf of their principal. In view of what we have said, no
business of selling coal was disclosed in the instance cited
before the Collector, and the order of the Tribunal was
correct on the facts placed before it.
In the result, the appeal fails and will be dismissed with
costs.
Appeal dismissed.
371