The court established that mere ownership of goods by an agent does not negate the existence of an agency relationship, contingent on adherence to licensing terms.

1This batch of three revision petitions, seeks to vacate the petitioner having been charged tax on sales of kerosene oil, in the assessment years 1953-54, 1954-55 and 1957-58. The claim for the exemption from the tax on the aforesaid sales, had been made on the basis of the dealer's being only the agent, and having earlier registered as such; but the claim had been rejected on the ground of the sales not being on behalf of Caltex India, Ltd., because of the petitioner's having bought the oil from the aforesaid concern earlier. The petitioner has, for the assessment year 1953-54, claimed exemption on Rs. 8,45,905-9-6 out of the total turnover of Rs. 17,63,726-11-0, on the ground of the amount representing, sales of kerosene as commission agent for Caltex India Ltd. As regards the next assessment year 1954-55, the amount asked to be exempted is Rs. 7,49,804 nP 84; and so far as the assessment year 1957-58 is concerned, Rs. 4,17,151 nP. 33 has been requested to be excluded for the same reason. The written agreement, which the petitioner asserts to be of agent, is dated June 1, 1952; but mentions the document to be kerosene sales agreement. It is not disputed that the petitioner's licence under S.9 of the General Sales Tax Act, No. XI of 1125, had been renewed for all the three assessment years, and which Section, omitting the unnecessary proviso, reads thus:--
"Government may, on application and on payment of such fee as may be prescribed in that behalf, license any person under this section who for an agreed commission or brokerage buys or sells on behalf of known principals specified in his accounts in respect of each transaction and may exempt from the tax or the taxes payable under S.3 such of his transactions as are
carried out in accordance with the terms and conditions of his licence.
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"Provided also that the burden of proving that a transaction is exempt, by virtue of this Section, from the tax or taxes payable under S.3, shall be on the licensee."
The assessing authority had disallowed all the claims for the reason, which reads as follows :--
"The agreement between the assessee and Caltex was, however, not made available for verification. A copy of the same was, therefore, called for from the company direct for verification. It is seen from the covering letter and copy of agreement furnished by the company that the previous agreement was replaced by a fresh and totally different one with effect from 1-6-1952. Whatever be the merit or defects of the previous agreement, the current one cannot be construed as a commission agency agreement in the accepted sense of the term and as contemplated under S.9. At best it is a distributorship, and the company reserves no ownership or other rights over the stocks in the possession of the assessee. I think the first clause of the agreement itself will set at rest any doubt or controversy. As per clause 12, the risk of loss or damage is also on the assessee. In the light of these facts, I feel that the claim for agency exemption under S.9, will not stand and will be disallowed.
The appeals against the aforesaid rejections having failed, the petitioner appealed to the Sales Tax Appellate Tribunal, and the Tribunal has also dismissed the appeals. It has found from clauses 2, 4, 5, 8, 12, 17, and 34 of the agreement that it is one of sale of kerosene to the petitioner, and, therefore, does not create the relationship of principal and agent between Caltex and the petitioner. There are no findings by the taxing authorities, nor by the Appellate Tribunal on what are the terms of the licenses, that had been renewed for the three assessment years, and whether these licenses cover the sales of kerosene by the petitioner as agent of the Caltex Company. The three revision petitions before us are against the orders for the three assessment years. Revision Petition No. 55/59 covers the assessment year 1954-55; No. 57/59, the assessment year 1957-5