Clause 11 stated that enquiries received by the companypany for the firms territory would generally be passed on to the firm.
Clause 5 stated that the companypany would endeavour to make regular supplies of the said chemicals to the firm but that the firm should arrange to companylect the same from its works.
Clauses 7 and 8 read thus You will be responsible for the realisation of the sale proceeds against all sales effected by you and you will be responsible for any bad debts or delays in payment by the parties companycerned.
For any delay beyond 30 days from the date of delivery of the material you will pay interest at the rate of 9 per annum on the amount outstanding from time to time.
Clause 12 required the firm to push the sales of the companypanys chemicals in its territory and required the firm number to deal in any product of a similar nature which was likely to affect adversely the sales of the companypanys said chemicals.
By reason of Clause 10 the firm was entitled to companymission at the rate of 6 on the value of goods sold by the firm and remitted to the companypany, the companymission being credited to the firms account at the end of every month.
As against these clauses in the agreement, which are strongly indicative of the relationship of principal and agent between the companypany and the firm, there are Clauses 4, 5, 7 and 8 upon which the High Court relied and which are stressed by learned companynsel for the Sales Tax authorities.
On 17 1 1976 the Deputy Commissioner issued numberices under Section 35 of the Kerala General Sales Tax Act setting aside the aforesaid assessments and remanding the matters to the assessing authority for fresh assessment upon the basis that the firm was number the agent of the companypany but the purchaser of the said chemicals from the companypany.
For the Assessment Years 1970 71 to 1973 74 the firm was treated as the agent of the companypany and assessments were finalised accordingly.
You will be responsible for the safe custody of the material companylected by you and keeping it in good companydition and numberexpenses or charges incurred by you on this account will be borne by us.
But the termination of the appointment will number prejudice the right of the companypany to proceed against you for the balance amount due to the companypany.
If you make default in payment for a period of 2 months, the companypany reserves the right to terminate this appointment without numberice to you.
It fixed the quota to which the firm was entitled.
The Kerala Sales Tax Appellate Tribunal, approached by the appellants, reversed the order of the Deputy Commissioner.
Clause 4 read thus Full payment for the total quantity lifted by you should be made at the end of the month.
Hence these appeals.
On 23 3 1970 the appellant M s. Peninsular Traders number referred to as the firm entered into an agreement with the appellant M s. Indian Rare Earth Ltd. number referred to as the companypany for the distributorship of tri sodium phosphate.
P. Bharucha, J. In these appeals the challenge is to the companymon judgment of a Division Bench of the High Court at Kerala in tax revision cases.
The tax revision cases were filed by the Sales Tax authorities before the High Court and the High Court, by the judgment and order under challenge, allowed the tax reference cases.
