The State of Bombay v. M/S. Ratilal Vadilal and Bros.

Hidayatullah ]. HIDAYATULLAH, J.-The State of Bombay has ap­ pealed 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 Ta;K passed under s. 27 of the Bombay Sales Tax Act, 1953. The respondents, Ratilal V adilal & Bros., are commission a.gents 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 determina­ tion of the question whether they could be ca.lied "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. 2 S.C.R. SUPREME COURT REPORTS 369 It appears that no action was taken to ask for a I9 60 reference to the High Court of Bombay under s. 34(1) n. State of read with ss. 30(1) and (2) of the Act. We have fre. Bombay quently noticed that all the remedies which are open v. to an appellant are not first exhausted before moving Mfs. Ratilal this Court. Ordinarily, this Court will not allow the Vadilal & Bros. High Court to be bypassed i~ this manner, and t~e Hiday;;:;;lah J. 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 res- pondent requested us to determine the question, stat- ing that his client who was a small trader and who ma.de 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. curBUB curiae for this Court. The matter relates to a time after the Colliery Con­ trol Order, 1945, came into force. Under that Order, no person could acquire or purchase coal from a colli­ ery except under authority of the Central Government for which purpose he had to obtain a. priority certifi­ cate from the State Coal Controller. Under the scheme of the Order, del credere agents were allowed to a.ct and to cha.rg~ a commission of one rupee per ton of coal. One N analal 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, Burha.r, 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 a.mount of the bill of the Colliery, a sum of Rs. 22 as their commis­ sion. The liability to pay the Colliery rested upon the respondents, but they claimed to be acting a.s mere " middlemen " between the Colliery and Ka.rsandas. The respondents stated that their business was a.long 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. 41 Ig6o The State of Bombay v. M /s. Ratilal Vadilal &- Bros. Hidayatullah j. "Dealer" in the Bombay Sa.Jes Tax Act, 1953, is defined a.s 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 hold­ ing a certificate. A sale otherwise was in contraven­ tion 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 ma.de 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 Karsa.ndas. 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, uor 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 dismiBaed.