Chandra Reddy, C.J.
1. This is an appeal against the order of the Commissioner of Commercial Taxes revising that of the Deputy Commissioner of Commercial Taxes, Guntur.
2. The appellant, Messrs. Ramakrishna Rice Working Company, Bhattiprole, returned a net turnover of Rs. 1,12,029-10-0, claiming exemption on a turnover of Rs. 2,65,382-5-6 representing the sales of rice for consumption outside the State. The Commercial Tax Officer disallowed the claim of the appellant for exemption in regard to a turnover of Rs. 2,11,363-8-9 holding that this amount was exigible to tax under Rule 13 of the Turnover and Assessment Rules.
3. Dissatisfied with this order of the Commercial Tax Officer, the appellant went up in appeal to the Deputy Commissioner of Commercial Taxes. This authority ruled that the transactions in question fell under Explanation to Article 286(1)(a) of the Constitution and as such the exemption claimed in regard thereto should be allowed, in this view of the matter, he directed the assessing authority to issue a revised demand notice in that regard.
4. The Commissioner of Commercial Taxes suo motuacting under Section 20(2) of the Andhra Pradesh GeneralSales Tax Act, sought to revise the order of the DeputyCommissioner as he felt that the Deputy Commissioner wasnot right in his opinion in regard to the turnover of Rs.1,38,229-8-0. Therefore, he issued a notice on 7-4-1961 to show cause against the proposed revision withinseven days from the date of its receipt and informing theappellant that he would be heard on 24-4-1961, if hewished to be heard. This notice was served on the appellant on 13-4-1961. Thereupon, he sent a telegram requesting for fifteen days' time. He was granted time till 1-5-1961 and he was duly informed of the Board's referenceon 29-4-1961. A further request was made for postponingthe hearing for another fifteen days in his telegram dated1-5-1961 and he was granted time till 15-5-61 and he wasinformed of it by memorandum dated 4-5-1961. On 15-5-1961, the appellant neither filed any objections nor appeared before the Board. The Board, therefore, considered that the assessee had no objections against theproposed revision and passed the orders now impugned.The appellant sent his objections ten flays later, namely,on 27-5-1961. It is that order that is the subject-matterof the challenge in this appeal.
5. In support of this appeal, it is argued by Sri G. V. R. Mohana Rao, learned counsel for the appellant, that the Board erred in thinking that the sales in question were completed within the State and, they were not attracted by the Explanation to Article 286(1)(a) of the Constitution. It is submitted that delivery was made outside the State as a direct result of the sale. The two essential conditions of the explanation sale, namely, (1) sale of goods and (2) delivery thereof outside the State as a term of the contract being satisfied in this case, the sales should be regarded as having taken place in the course of inter-state trade, proceeds the argument of the learned counsel for the appellant.
6. We do not think that we can give weight to this contention. It is true that there was a sale and that the actual delivery of the goods was taken outside the state for consumption. But the question for consideration is whether such a delivery was the direct result of the sale.
7. In the solution of this problem, the facts as emerge from the record should be borne in mind. The appellant sold the goods to certain commission agents, who were acting for the dealers outside the State and received the full price but booked the goods to places outside the State in his own name as consignor and consignee under the instructions of the Commission agents. Immediately, he endorsed the railway receipts in favour of the commission agents. Thereafter, the assessee had no control over them, the risk also having passed on to thecommission agents. Nothing remained further to be doneby him in furtherance of the contract. It is thus clearthat the commission agents bought the rice though forthe benefit of foreign dealers and instrucled the sellers tosend them to places outside the State which amounted totaking delivery before the export of the goods. As soon asthe booking was done, the railway receipts were endorsedin their favour and thereafter the assesste had completelydisappeared from the picture. Thus, the whole transaction including the delivery was completed within this State.Hence, the transaction should be regarded as inside sale.In such a situation, it is difficult to postulate that delivery of ths goods outside the State was the direct resultof the sale. It should ba borne in mind that the goodswould be delivered outside the State as those of the Commission agents and not of the sellers. That being thereal position, the transactions do not contain any inter-State elements.
8. This is the principle enunciated in Sri Ramakrishna Commercial Society v. State of Andhra, : AIR1961AP86 and Mahomed Ishok v. State of Madras : AIR1955Mad502 . The ruling of this Court in T. R. C. No. 98 of 1957 called in aid by the appellant has no analogy here. In that case, the assessee put the goods on boat or rail, as the case may be, incurred incidental expenses, obtained bills of lading or railway receipts, prepared the bills in the names of the foreign buyers and handed over the bills and the bills of lading or railway receipts to the forwarding agents. The forwarding agents raised money in the bank on hundies on the basis of the bills of lading or railway receipts, as the case may be, and paid the money to the assessees. On these facts, it was found by a Bench of this Court, to which one of us was a party, that the transactions partook inter-State character and consequently they fell within the protection afforded by Article 286(1)(a) of the Constitution. It is seen from the facts stated therein that the shipping agents acted as agents of the seller and not of the buyer. The mere fact that the forwarding agents raised monies on the strength of the shipping bills did not make any difference in regard to the character of interstate sales. That is not the situation here. In this case, as already stated, the Commission agents purchased on behalf of their principals residing in other States and they are not the agents of the sellers. Therefore, the rule stated in this case has no application here.
In the result, the appeal is dismissed with costs. Advocate's fee Rs. 100/-. (One hundred only).