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1. This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the said Act"), made at the instance of the Commissioner of Sales Tax. The question which has been referred to us for our determination is as follows :

"Whether, on the facts and in the circumstances of the case and having regard to the true interpretation of the contract between the respondent and M/s. Morarjee Raisey & Co. for the supply of electrolytic copper ingot bars embodied in the respondent's letter dated 15th February, 1963, which was also signed by M/s. Morarjee Raisey & Co. in confirmation, the Tribunal was justified in law in holding that the transaction was not a sale but was a transaction of agency not liable to tax under the provisions of the Bombay Sales Tax Act, 1959 ?"

5. Pursuant to these transactions the agreed quantity of electrolytic copper ingot bars was imported by the respondent and supplied to M.R. & Co. An invoice dated 7th March, 1963, was sent by the foreign company to the respondent which refers to the aforesaid contract dated 17th February, 1963. This invoice mentions the numbers of the various import licences pursuant to which the goods covered under the invoice have been shipped and one of these import licences whose number is given is the aforesaid import licence of M.R. & Co. The term of payment in this invoice shows that payment is to be made against first presentation of shipping documents. The respondent by its bill No. 157 dated 3rd May, 1963, addressed to M.R. & Co. demanded payment from M.R. & Co. of the amount of Rs. 2,706.89 as the amount payable to the respondent for the aforesaid goods supplied to M.R. & Co. The particulars contained in this bill show that electrolytic copper ingot bars were delivered against c.i.f. value of Rs. 2,415 of licence No. 183273 dated 29th May, 1962, issued to M.R. & Co., which licence was utilised in the import of the above lot under the said letter of authority issued by the Joint Chief Controller of Imports and Exports on 15th December, 1962. The bill further shows that handling commission including all charges and customs duty at the rate of Rs. 300 per metric ton came to Rs. 367.54. On 8th October, 1963, the respondent made an application to the Commissioner of Sales Tax, the applicant herein, inter alia, for determining the question as to whether the transaction entered into under the aforesaid bill or invoice No. 157 dated 3rd May, 1963, was a sale within the definition of that word in section 2(28) of the said Act. It is necessary to set out in detail all the statements contained in this application. Suffice it to say that this application set out that the mode of business of the respondent is that buyers approach the respondent first for the requirement of metal. These buyers hold actual user's import licences and the respondent has specialised arrangement to import the particular commodity which the buyers require. The respondent agrees to import the goods for the buyers against their import licences. On receipt of the letter of authority in respect of a licence belonging to a buyer, the respondent would place an indent with its foreign counterpart (the foreign company) for sending the goods required for the buyer's order. It has been further set out in this application that the respondent's foreign supplier arranges for shipment of bulk consignment to cover the various orders backed by actual user's import licences. The statements in this application show that a single consignment sent by the foreign supplier to the respondent would include the goods to be imported under several import licences belonging to different buyers. The Deputy Commissioner of Sales Tax, who disposed of this application, held that the transaction in question was one of sale by the respondent to M.R. & Co. The respondent preferred as appeal against this decision of the Deputy Commissioner to the Sales Tax Tribunal. The Sales Tax Tribunal accepted the contention of the respondent that the respondent had acted as the indenting agent of M.R. & Co. and that the transaction between the respondent and M.R. & Co. was not one of sale but only amounted to a supply by an agent to his principal. On the basis of this conclusion the Tribunal allowed the appeal preferred by the respondent. The correctness of this conclusion arrived at by the Tribunal is sought to be impugned by the Commissioner of Sales Tax by way of the question raised before us in this reference.

6. The submission of Mr. Bhabha, the learned counsel for the department, is that really speaking there were two sales in this case, one by the foreign company to the respondent and the other by the respondent to M.R. & Co. It was submitted by him that the transaction whereby the copper ingots were supplied by the respondent to M.R. & Co. was an independent transaction of sale and attracted the liability for payment of the sales tax. In our view, what we have really to determine is the true nature of the transaction which took place between the respondent and M.R. & Co. and as to what was the relationship between them regarding the supply of the aforesaid copper ingots by the respondent to M.R. & Co. In order to determine this, it appears to us, the first document which we must look at is the document recording the contract between the respondent and M.R. & Co. If we turn to this document, namely, the letter dated 15th February, 1963, the material contents whereof we have set out earlier, we find that in the opening part of the letter it has been recorded that the goods are agreed to be imported by the respondent against the import licence of M.R. & Co. and on the strength of the said letter of authority issued to the respondent. The price of the goods, that is, the copper ingots, is shown as pounds 239-5-0 per long ton c.i.f. Bombay, which is the same price as was charged by the foreign company to the respondent under the contract between them and this amount is subsequently referred to in the letter as the c.i.f. cost of the material. The term regarding "handling" shows that apart from the c.i.f. cost of the material, viz., pounds 239-5-0 per long ton, M.R. & Co. is required to pay Rs. 495 per metric ton for the copper ingots which amount includes clearing expenses, transportation, labour charges, customs duty applicable, despatching charges and the respondent's commission. It has been clearly set out in this letter that is must be noted that the respondent is acting merely as the indenting agent of M.R. & Co. for importing the goods on he account of M.R. & Co. and at their risk. In our view, the dominant intention of the parties to this contract is shown by the opening words in the letter to the effect that the respondent agreed to import the said copper ingots for M.R. & Co. against the import licence of M.R. & Co. and the note in the concluding portion which shows that the respondent was merely acting as an indenting agent of M.R. & Co. for importing the goods on the account of M.R. & Co. and at their risk. This, in our view, clearly indicates that the contract entered into between the respondent and M.R. & Co. was one of agency, whereby the respondent agreed to import the aforesaid copper ingots as the agent of M.R. & Co. and the respondent's main interest in the transaction was of earning commission. We may mention at this stage that bill No. 157 sent by the respondent to M.R. & Co. is also entirely consistent with the transaction between them being one of agency. This bill clearly shows that the goods have been imported by the respondent on the said import licence of M.R. & Co. and under the said letter of authority, and further shows that the handling commission of Rs. 495 per metric ton includes the customs duty at the rate of Rs. 300 per metric ton.

10. The next submission of Mr. Bhabha was that whatever the position under the contract embodied in the letter of 15th February, 1963, the letter dated 17th February, 1963, sent by the foreign company to the respondent and recording the contract between them clearly showed that the foreign company had sold the aforesaid copper ingots to the respondent and that the ownership in the ingots on importation was that of the respondent. He has placed strong reliance on the fact that the terms and conditions of this contract are those of a normal contact of sale. In our view, the circumstance that most of the terms and conditions of this contract are such as are normally found in a contract of sale is not of much significance because what we have to determine is really the relationship between the respondent and M.R. & Co., and not the relationship between the foreign company and the respondent. Moreover, in this contract itself it is significant that the numbers of the import licences of the buyers are set out and one of the numbers set out is that of the import licence of M.R. & Co. Further, the clause relating to consumption certificate shows that the foreign company was entitled to require that the import licence, import certificate, end use certificate and delivery verification certificate should be supplied to them. These two clauses in this contract take along with the fact that the import licences referred to were actual user's licences contain some indication that the respondent was not importing the goods for itself but on account of the buyers, the numbers of whose import licences were given in the said contract. It was submitted by Mr. Bhabha that it was significant that the terms and conditions in the contract between the respondent and M.R. & Co. were not identical with the terms and conditions contained in the contract between the respondent and the foreign company. This, in our view, is not of much significance at all. There are no such differences in these terms and conditions as would lead to the conclusion that the respondent had imported the goods on its own behalf and in its turn sold the goods to M.R. & Co. as contended by Mr. Bhabha. In fact, what is more significant is that in the contract dated 17th February, 1963, between the foreign company and the respondent the price of the copper ingots is shown as pounds 239-5-0 per long ton c.i.f. and in the contract between the respondent and M.R. & Co. this very sum has been shown as the price per long ton c.i.f. Bombay, and this has been referred to subsequently in that contract as the c.i.f. cost of the material.