1. The only question that arises in this tax case is as to whether the respondent herein has sold empty gunnies to local purchasers as well as outside State purchasers or whether he acted as a buying agent for local as well as outside State buyers. The assessing authority held that when submitting his tender for the purchase of gunnies from Pamani Fertilizers Limited, he tendered in his individual capacity and it is only after the tender was accepted he has sold the goods to the local as well as outside State purchasers and therefore the assessee is liable to pay sales tax on its sales of empty gunnies to various dealers, both local and outside State. The Tribunal, however, found that the assessee acted only as a buying agent when he submitted a tender for the purchase of empty gunnies from Pamani Fertilizers Limited and therefore the sale of gunny bags should be taken to have been by Pamani Fertilizers Limited to the purchasers and there is no actual sale of gunny bags by the assessee and therefore he is not liable to any sales tax on the gunnies purchased on behalf of the various buyers for whom he has acted as a buying agent. In this view, the Tribunal not only set aside the assessment on the alleged sales of gunny bags by the assessee to various purchasers, but also the penalty levied by the assessing authority and confirmed by the Appellate Assistant Commissioner. The view taken by the Tribunal has been challenged in this tax case filed by the State.
2. On the materials on record, the conclusion of the Tribunal that there was no sale of gunny bags by the assessee appears to be right. The assessee runs a gunny mundy at Mannargudi. For the assessment year 1979-80, the assessing authority passed a best judgment assessment fixing the total turnover at Rs. 9,97,456 and the taxable turnover at Rs. 9,72,062 as against the total and taxable turnover of Rs. 5,32,742 and Rs. 5,05,727 respectively. The assessing authority also levied a penalty of Rs. 24,930 being 1 1/2 times the tax due under section 12(3) of the Act. There was an appeal by the assessee to the Appellate Assistant Commissioner and in that appeal the taxable turnover was reduced from Rs. 9,72,062 to Rs. 5,83,847. He also set aside a portion of the penalty levied and reduced it to Rs. 1,937. The assessee took the matter in appeal to the Sales Tax Appellate Tribunal. Before the Tribunal, the assessee only contended that the sum of Rs. 28,552 made as representing the sales turnover of gunnies should be deleted as the assessee has not sold the gunnies to the turnover of Rs. 23,552 and that in fact the gunnies were purchased for the said sum from Pamani Fertilizers Limited as a purchasing agent on behalf of others and therefore he is not liable to pay tax on the said turnover. In support of his submission that he has acted only as a purchasing agent with reference to the turnover of gunny bags to the extent of Rs. 28,552 he produced the account books showing that he has received only his commission in relation to the purchase of gunnies from Pamani Fertilizers Limited and that he has not effected any subsequent sale in favour of the principals on whose behalf he has acted as a commission agent. The assessee also produced the actual tender for the purchase of the gunny bags where in he has specifically mentioned that in case Pamani Fertilizers accepted the tender of the assessee, then Pamani Fertilizers has to sell the goods to the purchasers mentioned by the assessee directly. This recital in the tender was taken by the Tribunal as conclusively showing that at no time the assessee took delivery of the goods from Pamani Fertilizers resulting in the conclusion of a contract of sale between Pamani Fertilizers and the appellant. The assessee also produced the bills issued by Pamani Fertilizers in favour of the actual persons for whom the assessee has acted as purchasing agent and the bills indicate that Pamani Fertilizers drew the bills directly against the ultimate preachers and collected the charges for the gunnies directly from them. The assessee also produced the bills issued by the carriers showing that Pamani Fertilizers directly sent the goods to the outside State purchasers in Indore and the goods have been showing Pamani Fertilizers as consignors and the out-of-State buyers as consignees. These facts have been taken note by the Tribunal as conclusively showing that the assessee has acted as a purchasing agent and as a purchaser while submitting the tender for the purchase of gunny bags. The above factors which have been relied on by the Tribunal are quite relevant for determining the question as to whether the assessee purchased the goods from Pamani Fertilizers and then sold them to various purchasers, or whether he merely acted as a purchasing agent. Having regard to the above factors which have been established before the Tribunal, we are of the view that the Tribunal has come to a right conclusion in this case in holding that the assessee acted only as purchasing agent so far as the transaction of purchase of gunny bags from Pamani Fertilizers is concerned. Having regard to the fact that the addition of Rs. 28,552 made by the assessing authority on the basis of the best of judgment assessment, has been deleted by the Tribunal, the penalty levied on the basis of the said addition has naturally to be set aside as has been done by the Tribunal. The tax case therefore fails and is dismissed.