Judgement

SHAH, J.: The respondent-hereinafter called the assessee has its Head Office at Calcutta and a Branch Office at Jaipur, and is registered as a "dealer under the Rajasthan Sales Tax Act, 1954. Under a contract dated September 2, 1948, with the Equitable Coal Company the assessee acquired monopoly rights to supply on behalf of the collieries, coal in certain areas including Rajasthan. Under an agreement date April 28, 1955, with the State of Rajasthan the assessee supplied coal to the State Power Houses upto May 19, 1958. The Sales Tax Officer, City Circle A, Jaipur assessed to tax the turnover of the assessee in the year 1955-56 from the supply of coal to the State of Rajasthan.

2. The assessee then moved a petition under Article 226 of the Constitution in the High Court of Rajasthan for a writ quashing the order of assessment of the Sales Tax Officer. The High Court accepted the plea that the assessee was not a dealer within the meaning of the Act and quashed the assessment. In appeal by the State of Rajasthan against the order of the High Court, this Court held that the assessee was a dealer within the meaning of the explanation to Sec. 2 (f) of the Rajasthan,Sales Tax Act, since the assessee was an agent for sale for the Equitable Coal Company which carried on the business of buying, selling or supplying goods in the State. But this Court remitted the case to the High Court for determination of certain other questions which were not decided.

3. The High Court on remand held that there was no sale of, coal by the assessee to the State of Rajasthan; that in any event the sales were inter-State sales from the collieries in other States to the State of Rajasthan and that the Sales Tax Laws Validation Act 7 of 1956 which validated the levy of sales tax on inter-State sales till September 6, 1955, did not operate to vaildate the order of assessment, which was a composite order for the entire assessment year 1955-56. The High Court again issued a writ quashing the assessment. The State of Rajasthan has appealed to this Court with certificate granted by the High Court under Article 133 (1) (a) of the Constitution.

4. In support of the appeal the Solicitor-General urged two contentions:-

(1) In relying upon the judgment of this Court in New India Sugar Mills Ltd. v. Commissioner of Sales Tax, Bihar, 1963 Supp 2 SCR 459 in support of the conclusion that there was no sale of coal within the meaning of the Rajasthan Sales Tax Act, the High Court seriously erred; and

(2) that the order of assessment made by the Sales Tax Officer for the financial year 1955-56 is not liable to be quashed insofar as it relates to the period April 1, 1955, to September 6, 1955, in view of the provisions of the Sales Tax Laws Validation Act 7 of 1956.

5. Under the agreement dated September 2, 1948, with the Equitable Civil Company Ltd. the assessee was granted a monopoly right to supply coal in certain areas including the territory of Rajasthan. The assessee was to arrange dispatches to cover the quantities of coal reserved on its account by the Equitable Coal Company. This Court in the judgment dated October 9, 1964, held that the assessee was an agent of the Equitable Coal Company and sold coal on behalf of that Company. Under the agreement dated April 28, 1955, with His Highness the Rajpramukh of the State of Rajasthan the assessee was to supply coal to the Rajasthan Government in accordance with the specifications and on the terms set out therein. The assessee undertook threby to supply coal at controlled rates F. O. R. Colliery and to arrange all the transport and sale delivery of coal at Jaipur Power House.

6. At all times material in this appeal supply of coal was governed by the Colliery Control Order, 1945. By Cl. 4 of the Order, the Central Government was competent to fix the prices at which coal may be sold by colliery owners. By Clause 5 the colliery owners and their agents were prohibited from selling or agreeing to sell or offering to sell