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The State of Andhra Pradesh Vs. the Dunlop Rubber Co. (India) Limited and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberTax Revision Case Nos. 62 to 74, 76, 77 and 78 of 1958 and Writ Petition Nos. 291 and 496 of 1957
Judge
Reported in[1960]11STC632(AP)
AppellantThe State of Andhra Pradesh
RespondentThe Dunlop Rubber Co. (India) Limited and ors.
Appellant AdvocateM.S. Ramachandra Rao, The Second Government Pleader in Tax Revision Case Nos. 62 to 74 , 76, 77 and 78 of 1958 and ;E. Venkatesam, ;P. Kodandarmayya and ;B. Jagannadha Rao, Advs. in Writ Petition Nos.
Respondent AdvocateP. Ramachandra Reddi, The Third government Pleader and ;Z.A. Kamil, ;Ali Adil, ;N.C.V. Ramanujachari, ;K. Ranganadhachari, ;G.V.R. Mohan Rao, ;V. Rajaram Iyer and ;R. Vaidyanathan, Advs. for all Tax R
Excerpt:
- - the appeal of the respondents against this assessment to the deputy commissioner, hyderabad, was unsuccessful. 5. sale' is defined in that clause, omitting that is immaterial, as meaning every transfer of property in good by one person to another in the course of trade or business for cash or for deferred payment for other valuable consideration. these considerations will clearly be inapposite in construing a taxing statute like the madras act, the object of which is primarily to confer power on the state to levy and collect tax. it is a well-recognised mode of incorporating one statute or system of statutes into another and it serves to bring into the latter all that is covered by the reference. it is equally well-settled that if the language is sufficiently flexible, an.....chandra reddy, c.j.1. the main controversy in most of these cases centers round the interpretation of section 2 of the hyderabad general sales tax act (hereinafter referred to as 'the act'). the tax revision cases are directed against the order of the sales tax appellate tribunal, upholding the objections of the assessees that the sales in question were not taxable as they do not come within the purview of section 2(k) of the act. some of the writ petitions also raise the same question, while others deal with the constitutionality of section 11 (2) of the act.2. we shall first take up one of the tax revision cases, which involves the construction of section 2(k)of the act, as the decision therein will govern the rest of them.3. t.r.c. no. 62 of 1958.-this relates to the assessment year.....
Judgment:

Chandra Reddy, C.J.

1. The main controversy in most of these cases centers round the interpretation of Section 2 of the Hyderabad General Sales Tax Act (hereinafter referred to as 'the Act'). The tax revision cases are directed against the order of the Sales Tax Appellate Tribunal, upholding the objections of the assessees that the sales in question were not taxable as they do not come within the purview of Section 2(k) of the Act. Some of the writ petitions also raise the same question, while others deal with the constitutionality of Section 11 (2) of the Act.

2. We shall first take up one of the tax revision cases, which involves the construction of Section 2(k)of the Act, as the decision therein will govern the rest of them.

3. T.R.C. No. 62 of 1958.-This relates to the assessment year 1953-54. The respondents, who are the assessees, are a limited company carrying on business in rubber tyres, tubes,etc., in the erstwhile Hyderabad State with their office at Bombay. The assessees sold their tyres and tubes either to merchants or consumers in Hyderabad State as the direct result of which they were delivered in the taxing territory for consumption. The Sales Tax Officer, Central Circle, Hyderabad, assessed their turnover to tax. The appeal of the respondents against this assessment to the Deputy Commissioner, Hyderabad, was unsuccessful. A further appeal was filed by the assessees before the Sales Tax Appellate Tribunal. The Tribunal upheld the contention of the assessees that the sales in question were not taxable under the provisions of the Act by reason of Explanation 2 to Clause (k) of Section 2 of the Act. The Tribunal declined to go into the question as together the sales occurred within the Hyderabad State, taking the view that they partook of the character of inter-State sales and were therefore hit at by Explanation 2. The department, aggrieved by this order, has carried a revision to this Court.

4. The decision of this revision case as of most others, turns upon the interpretation of Section 2(k) of the Act. At the outset, it may be mentioned that this Act was passed on the 11th of April, 1950, i.e., after the inauguration of the Constitution and it came into force on Ist May, 1950. It is convenient at this stage to read Section 2(k), which is revevant in the context of this enquiry.

5. 'Sale' is defined in that clause, omitting that is immaterial, as meaning every transfer of property in good by one person to another in the course of trade or business for cash or for deferred payment for other valuable consideration.

Explanation 2: Notwithstanding anything to the contrary in any other law for the time being in force, a transfer of goods, in respect of which no tax can be imposed by reason of the provisions contained in Article 286 of the Constitution, shall not be deemed to be 'sale' with in the meaning of this clause.

6. It may be mentioned that Explanation 2 was substituted for the original Explanation 2 by Section 2 of the Hyderabad General Sales Tax (Amendment) Act, 1950, i.e., Hyderabad Act XXXII of 1950. That Explanation ran as follows:

Notwithstanding anything to the contrary in the Hyderabad Sale of Goods Act of 1351-F, but subject to Article 286 of the Constitution of India, the sale or purchase of any goods shall be deemed for the purposes of this Act, to have taken place in the Hyderabad State wherever the contract of sale or purchase might have been made, if-

(1) the goods are designed to be consumed in the Hyderabad State, and

(2) the goods were actually in the Hyderabad State at the time when the contract of purchase or sale in respect thereof was made, or

(b) in case the contract was for the sale or purchase of future goods by description, the goods are actually produced in the Hyderabad State at any time after the contract of sale or purchase in respect thereof was made.

(c) property in the goods is transferred from a dealer outside the Hyderabad State to a purchaser in the State directly or through a bank or any other person or institution.

7. This Explanation was presumably inserted into that clause in order to give effect to the restrictions laid down by Article 286 of the Constitution in regard to the imposition of tax on the sale or purchase of goods in certain categories specified therein. It may be noted that, after the Constitution came into force, the various Provincial Legislatures introduced provisions into the Sales Tax Acts so as to bring them in line with this provision of the Constitution. We will have occasion to advert to such provisions in one or two enactments presently.

8. Having regard to the part this Article plays in connection with this enquiry, it is necessary to refer to the terms thereof:-

Article 286 No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place,

(a) outside the State; or

(b) in the course of the import of the goods into, or export of the goods out of, the territory of India.

Explanation: For the purpose of Sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods had by reason of such sale or purchase passed in another State.

(2) Expect in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce:

Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951.(3) No law made by the Legislature of a State imposing or authorizing the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent.

9. The scope and ambit of this Explanation fell to be considered by the Supreme Court in State of Bombay v. United Motors [1953] S.C.R. 1069. It was held there by a majority of judges that, though the sales falling within the Explanation to that Article would in face be in the course of inter-State trade, by reason of the fiction created by that Explanation, they became invested with the character of intra-State sales and were liable to be taxed by the State if the goods were delivered therein for consumption.

10. Some time latter, the same Explanation was the subject-matter of enquiry before the Supreme Court in Bengal Immunity Co. v. State of Bihar and Ors. [1955] 2 S.C.R. 603. On this occasion, the majority of the Judges adopted a different approach and outlook. The learned judges negatived the power of the State to tax such sales as they were inter-State in character unless the Parliament lifted the ban and the judgment of the majority said that said that the law had not been correctly laid down in the United Motors case [1953]S.C.R. 1069. This rendered the imposition of tax on Explanation sales, if we may se the expression for the sake of brevity, unconstitutional. This led to the promulgation of the Sales Tax Laws Validation Ordinance in January, 1956, which as latter replaced by the Sales Tax Laws Validation Act (VII of 1956). Section 2 of that Act provides:-

Notwithstanding any judgment, decree or order of any court, no law of a State imposing, or authorizing the imposition of, a tax on the sale or purchase of any goods where such sale or purchase took place in the course of inter-State trade or commerce during the period between the Ist day of April, 1951, and the 6th day of September, 1955, shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sale or purchase took place in the course of inter-State trade or commerce; and all such taxes levied or collected or purporting to have been levied or collected during the aforesaid period shall be deemed always to have been validly levied or collected in accordance with law.

11. Indisputably, the impugned assessment was during the period specified in the section and also related to sales or purchases that took place in the course of inter-State trade or commerce. Consequently, they fall within the purview of that section. But there is an essential condition to attract the applicability of that section, namely, the existence of a law imposing or authorising the imposition of a tax on sales or purchases as contemplated therein. So the principal question that falls to be determined is whether the relevant section of the Act permitted such an imposition. As already noticed, under the definition of sale as contained in Section 2(k), power is conferred on the State to tax only sales in which the property in the goods passed inside the State. That does not take in transactions which take place outside the State. We must, therefore, turn to Explanation 2 to see if that vests any authority in the State to subject such sales to tax.

12. Before we proceed to consider further this aspect of the matter, we have to advert to a pronouncement of the Supreme Court, which has a very material bearing on the present controversy, in Sundararamier & Co. v. The State of Andhra Pradesh [1958] 9 S.T.C. 298. The question posed there was whether the State of Andhra could take proceedings for imposing tax on sales in which the property in the goods passed in the Madras State while the goods were delivered for consumption in the Andhra State; in the Andhra State in other words, whether the delivery State cold tax Explanation sales.

13. The contention raised by the assessees was that, as the sales were made in the course of inter-State trade, no tax could be levied on them by reason of the prohibition contained in Article 286 of the Constitution. 22 Whether such a power inhered in the Andhra State depended on Section 22 of the Madras General Sales Tax Act, which was adopted by the Andhra State. That section had reproduced Article 286 of the Constitution and it runs as follows:-

Nothing contained in this Act shall be deemed to impose or authorise the imposition of, a tax on the sale or purchase of any goods, where such sale or purchase takes place.

(a)(i) outside the State of Madras, or

(ii) in the course of the import of the goods into the territory of India or of the export of the goods out of such territory, or

(b) except in so far as Parliament may by law otherwise provide, after the 31st day of March, 1951, in the course of inter-State trade or commerce and the provisions of this Act shall be read and construed accordingly.

Explanation: -for the purposes of Clause (a)(i), sale or purchase shall be deemed to have taken place in the state in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that state, notwithstanding the fact that under the general law relating to sale of goods, the property in the goods has by reason of such sale or purchase passed n another State.

14. The argument advanced on behalf of the dealers was that notwithstanding Article 286 being expressed in passim verbal in Section 22, the Andhra State could not make the impost having regard to the construction put by the Supreme Court on the Explanation to Article 286 in the Bengal immunity case [1955] 2 S.C.R. 603. It was urged that a different construction could not be given to the same provision embodied in Section 22 of the Madras General Sales Tax Act. This did not find favour with the Supreme Court. In repelling that argument, Venkatarama Ayyar, J., said:

These considerations will clearly be inapposite in construing a taxing statute like the Madras Act, the object of which is primarily to confer power on the State to levy and collect tax. When we find in such a statute a provision containing a prohibition followed by an Explanation which is positive in its terms, the true interpretation to be put on its is that while the prohibition is intended to prevent taxation of outside sales on the basis of the nexus doctrine, the Explanation is intended to authorise taxation of sales falling within its purview, subject of course to the other provisions of the Constitution, such as Article 286. It should be remembered that unlike the Constitution, the law of a State can speak only within its own territories. It cannot operate either to invest another State with a power which it does not possess, or divest it of a power which it does possess under the Constitution. Its or mandates can run only within its own borders. That being the position, what purpose would the Explanation serve in Section 22 of the Madras Act, if it merely meant that when goods are delivered under a contract of sale for consumption in the State of Madras, the outside State in which the property in the goods passes has no power to tax the sale?That is not the concern of the State of Madras and indeed, the Legislature of Madras would be incomepetent to enact such a law. In its context and setting, therefore, the Explanation to Section 22 must mean that it authorises the State of Madras to impose a tax on sales falling within its purview. Thus, while in the context of Article 286 the Explanation thereto could be construed as purely negative in character though positive in form, it cannot be so construed in its setting in Section 22 of the Madras Act, where it must have a positive content.

15. The result of this ruling is that when Article 286 of the Constitution is bodily lifted and incorporated into the Sales Tax Acts of various States, it authorises the delivery States to tax Explanation sales. In other words, the provisions of Article 286 when enacted in the Provincial Sales Tax Acts would have a different import and would operate to enlarge the powers of the delivery States in the regard. This ruling is sought to be distinguished on the ground that the Explanation in issue does not contain any such provision. It is said that situation here is altogether different. Undoubtedly, there is not express provision in this similar to Section 22 of the Madras General Sales Tax Act. Is that decisive of the matter?

16. This takes us to the point whether there is anything in the context of Section 2(k) which can persuade us to infer that the position is analogous to that envisaged in Section 22 in other words, could we read Article 286 into Explanation 2 ?

17. The argument pressed upon us by the counsel on behalf of the assessees is that there is no warrant for doing it as the only purpose of Explanation 2 was to exclude certain categories of sales, which fell under Article 286 of the Constitution from the definition of sale and that it is only the prohibition underlying Article 286 that has been brought into this Explanation. It is further urged that the original Explanation 2, which was analogous to the Explanation to Article 286 was deleted and the present Explanation enacted and that this emphasises the intention of the Legislature to take certain sales out of the purview of the relevant definition and not to expand it by reading Article 286 into the Explanation.

18. We find ourselves in disagreement with this view. As already pointed out, the object of adding this Explanation was to bring the Sales Tax laws of the States in consonance with the Constitution. In fact, the existing State laws allover India were attempted to be brought into conformity with the provisions of the Constitution by means of adaptation laws and subsequent amendments. In doing so, the different States adopted different devices. The main bulk of the sales Tax Acts added sections similar to Section 22 of the Madras General Sales Tax Act. Some States amended the definition section itself by incorporating the Explanation. A few of the States adopted a different device, for instance, the Assam Sales Tax Act, 1947, made an addition to the charging Section 3 of the Act by inserting the Following, Section 3(1-A) to the same effect:

Nothing in Sub-section (1) shall, except in cases covered by the first proviso to Sub-section (12) of Section 2 of this Act be deemed to render any dealer liable to tax on the sale of goods where such sale takes place:-

(i) outside the State of Assam;

(ii) in the course of the import of the goods into or export of the goods out of, the territory of India; or

(iii) in the course of inter-State trade or commerce except in so far as Parliament may by law otherwise provide.

19. Another example of such a device is Section 2(k) of the Hyderabad General Sales Tax Act. Does the absence of an express provision in that behalf make any difference, that is to say, does it indicate that the only intention of the Legislature was to give effect to the prohibition involved in Article 286 of the Constitution and not to incorporate the whole of that Article? In our considered opinion, this follows the same pattern as Section 22 of the Madras General Sales Tax Act or Section 26 of the Travancore-Cochin General Sales Tax Act or similar provisions contained in other Sales Tax Acts. By referring to Article 286 of the Constitution, the Legislature had incorporated the whole of the Article in this Explanation. It is a well-recognised mode of incorporating one statute or system of statutes into another and it serves to bring into the latter all that is covered by the reference.

20. An instance of such legislation is to be found in Re Wood's Estate Ex parte Her Majesty's commissioners of Works and Buildings [1886] 31 Ch. D. 607. Dealing with the effect of the incorporation of some provisions of the Lands Clauses, Act into the Downing Street Public Officers Extension Act, 1855, (18 and 19 Vic.c. 95), Lord Esher, M.R., remarked:-

It is to put them into the Act of 1855, just as if they had been written into it for the first time. If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act just as if they had actually written it with the pen, or printed in it, and the moment you have those clauses in the later Act, you have no occasion to refer to the former Act at all. For all practical purposes, therefore, those sections of the Act of 1840 are to be dealt with as if they were actually in the Act of 1855.

21. Panama Railroad Co. v. Johnson 264 US.-68 Lawyers' Edition 748 also illustrates this principle. It is true that Article 286 of the Constitution is not made a part of the Explanation in question in so many words. But we are inclined to think that an express declaration is not essential to make it such. The setting in which the reference to Article 286 of the Constitution is made, the scheme of the Act, and the words used many indicate that one statute was imported into another. In the present case, the object and the language inescapably lead to the conclusion that Article 286 was written into the Explanation. The words 'by reason of the provisions contained in Article 286 was written into the Explanation. As a result of the non-obstinate clause in the Explanation, the ambit of clause (k) of Section 2 is cut down. This was necessitated by the restriction laid down by Article 286. In order to ascertain the nature of the restriction laid down by have to read the provisions of Article 286 including the Explanation which by its fictional test has converted outside sales into inside sales. That Explanation as understood in the context of the Constitution, though couched in a positive form, was regarded purely as negative in character. But when engrafted into the Sales Tax Act, it has a positive element, thus authorizing the State to impose a tax on Explanation sales. To put it differently, that explanation acquires a force, which it did not have in the source from which it was drawn. We find it difficult to postulate that it was only the negative element of the Explanation, which prevented a State by the fictional test from taxing sales which resulted in the delivery of goods for consumption outside the State, that was written into it. We do not think it is purely negative in content. If the Explanation is requisite to give effect to the negative aspect of the concept, which is pointed out above it should also operative to give effect to the positive aspect which is integrally connected with the negative element. Both are different facets of the same concept. It cannot be contended that the Legislature intended to impose a restriction on the taxing power of the State in regard to all inter-State transactions both when the sales took place inside that State and when the goods were delivered for consumption inside the State irrespective of the operation of Article 286. The section makes it reasonably clear that the restriction is in terms of Article 286, i.e., to sales to which Article 286 of the Constitution was attracted. That implied that Article 286 was read into that Explanation. By so holding, we will be giving effect to the manifest intention of the Legislature. But we are aware of the rule that if the language of the provision of a law is unambiguous and susceptible of only one interpretation, then that must be given the natural meaning, even if that tends to defeat the aim of the legislation and however illogical the position might be and more so, if the plain language supports the subject against the taxing department. In interpreting fiscal enactments and in adjudicating upon the liability of a subject to tax, Courts should be guide only by the strict letter or the law and not merely by the spirit of the statute or the substance of the law and if the tax is not covered by the four corners of the statute, tax cannot be levied by inference or by analogy or by probing into the intention of the Legislature. The language of a statute must not be strained to make it apply to a case to which it does not legitimately on its terms apply by invoking considerations of the supposed intention of the Legislature. It is equally well-settled that if the language is sufficiently flexible, an interpretation which is more in harmony with the Legislature. Intent must be put upon it. The endeavour should be to give a real meaning to the statute. If two constructions are equally permissible, that which leads to smooth working of the system which the statute purports to be regulating should be preferred and the alternative that creates uncertainty and confusion in the working of the system should be rejected. Courts should lean in favour of a construction which is on the whole best calculated to carry out the object of the enactment if it could be ascertained, and which avoids absurd results.

22. We may here usefully extract the following passage from Hals-bury's Laws of England,Hailsham Edition, Vol. 31, page 497:

If it is possible, the words of a statute must be construed so as to give a sensible meaning to them, ut res magis valeat quam pereat. This rule applies where the words under consideration admit of two interpretations, one leading to an absurdity and one not, in which case the court will conclude that the Legislature did not intend to lead to are clear, they must be followed, even though they lead to a manifest absurdity.

23. In Maxwell's interpretation of Statutes, it is said:-

To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act.

24. If we view the section in the light of these rules, it does not present much of a difficulty. Taking into consideration the main object and the intention of the statute, we are of opinion that the whole Article 286 is imported into the section and it has the same connotation as Section 22of the Madras General Sales Tax Act and consequently the doctrine of Sundararamier & Co. v. State of Andhra Pradesh [1958] 9 S.T.C.298 applies with full force to Section 2 (k) of the Hyderabad General Sales Tax Act.

25. We are, to some extent, fortified by the remarks of the supreme Court in Fernandez v. State of Kerala A.I.R. 1957 S.C. 657. It is true that the provisions of the Hyderabad General Sales Tax Act were not the subject-matter of the appeal before their Lordships. Judges, while dealing with the devices adopted by the several Legislatures to bring the Sales Tax Acts into conformity with the restrictions imposed by Article 286 referred to the different expedients adopted in the Assam Sales Tax Act, 1947, and the Hyderabad General Sales Tax Act, 1950. Their Lordships said that Section 2(k) of the Act was similar to the provisions in the Assam Sales Tax Act, which has been extracted above. The learned Judges proceeded on the assumption that Section 2 (k) of the Act had incorporated the provisions of Article 286 of the Constitution. This is what Bhagwati, J., said in paragraph 35 of the judgment:-

We are not called upon to express any opinion as to whether the incorporation of the provisions of Article 286 of the Constitution in the charging section as it was done in the Assam Sales Tax Act, 1947, or in the definition of 'sale' as it was done in the Hyderabad General Sales Tax Act, 1950, or even in the rules in regard to the calculation of the taxable turnover as it was done in the Bombay Sales Tax Rules, 1952, had the effect of taking the sales falling within the categories specified in Article 286 out of the purview of the respective Sales Tax Acts, so that they would not be included at all within the calculation of the net turnover on which only the sales tax could be levied.

26. The various remarks made by the learned Judge in the course of the judgment gives an indication that Section 2(k) with Explanation 2 serves the same purpose as the provisions of the Sales Tax Acts of other States, such as Section 22 of the Madras General Sales Tax Act or Section 26 of the Travancore-Cochin General Sales Tax Act. We are convinced that the wording of Explanation 2 is of sufficient amplitude to incorporate Article 286. In this instance, the Legislature has adopted the device of legislation by reference. The utmost that could be said is that the intention was inelegantly expressed or apt or accurate terms were not employed. But that should not be allowed to stand in the way of interpreting the language as carrying the meaning the Legislature intended that it bears.

27. We are not also very much impressed with the argument based on ' the deletion of the original Explanation 2. Presumably, the Legislature had replaced it by the present with a view to make it more comprehensive and to carry out the full significance of Article 286. In this connection, it is not out of place to notice that, under the old Explanation 2, in addition to the importation of goods for consumption into the State, some other requirements were to be satisfied. '

28. That being so, the Validation Act of 1956 has saved all the impositions and, therefore, the Revenue was entitled to levy tax on the sales in all these cases.

29. In this view of the matter, it may not be necessary for us to go into the question whether sales in respect of which property in the goods passed in the State could be taxed. However, in order to clear the misconception created by the order of the Tribunal that, by force of Clause (2) of Article 286, even inter-State sales were not taxable, we propose to express our opinion on that aspect of the matter also.

30. We have already adverted to the definition of 'sale ', the main ingredient of which is 'transfer of property in the goods by one person to another in the course of business.' The charging section in this Act authorises the levy of tax on such sales. But the State could not impose a tax on such transactions if they partook of inter-State character by force of Article 286. That inhibition lasted only so long as there was no law passed by the Parliament. The moment the legislation is made by Parliament, the ban is lifted and the restriction on the taxing power of the State ceases to operate. Therefore, such sales are liable to tax.

31. In the result, this revision case is allowed with costs. Advocate's fee is fixed at Rs. 100.

32. T.R.Cs. Nos. 63, 65, 66, 67, 69, 70, 71, 72, 74, 77 and 78 of 1958.- In all these cases, goods were delivered in the Hyderabad State for consumption as a direct result of such sales. Therefore, they are also governed by our decision in the above case. These revision cases are allowed with costs. Advocate's fee Rs. 100 in each.

33. T.R.Cs. Nos. 64 and 73 of 1958.-These cases have to be remitted to the Tribunal for an investigation into certain facts. In this category of cases, it was contended that the assessees were only non-resident agents and not non-resident principals, and, as such, they would not come within the definition of 'dealer '. The Tribunal had not gone into that question evidently in the view it took in regard to the taxability of explanation sales. It now becomes necessary for the Tribunal to decide the issue raised before it and repeated before us as to whether these respondents are merely non-resident agents.

34. In T.R.Cs. Nos. 68 and 76 of 1958, Sri Rajaram Aiyar raises the point that his clients are also non-resident agents and non-resident dealers but this does not seem to have been advanced either before the assessing authority or before the Deputy Commissioner. Despite this fact we think that these are fit cases which should be sent back to the Tribunal for investigation into the question as to whether these respondents are non-resident agents since it appears from a copy of the affidavit produced by Sri Rajaram Aiyar that some such point Was sought to be raised before the Tribunal

35. In all the remanded cases the respondents will pay costs to the petitioners as the main contention advanced on their behalf was the same as that involved in the other cases. Advocate's fee is fixed at Rs. 100 in each.

36. Writ Petitions Nos. 291 and 496 of 1957 are dismissed with costs. Advocate's fee Rs. 100 in each. We are told that the petitioners have also preferred appeals before the Deputy Commissioner against the assessments raising various contentions. Our order in these writ petitions does not preclude the petitioners from raising other points since the arguments here were confined only to the effect of the Validation Act.


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