SWAMIKKANNU, J.


This is a writ petition filed for quashing the order of the respondent made in TNGST No. 58193/69-70 dated 28th March, 1974. It is, inter alia, stated in the affidavit sworn to by M. J. Durairaj, the petitioner herein, as follows :


2. The petitioner had been assessed to sales tax on a turnover of Rs. 80, 254.88 for the assessment year 1969-70 on the basis of a sale which he was alleged to have made to one M/s. Viswanatha Rupa & Company, Madras-1. The only indication for the aforesaid sale was an observation made by the Sales Tax Appellate Tribunal while disposing of an appeal pertaining to M/s. Viswanatha Rupa & Company. The assessment order dated 28th March, 1974 and which is impugned in this writ petition does not indicate for what period M/s. Viswanatha Rupa & Company has been assessed to sales tax, which assessment, according to the department amongst others, pertains to a transaction between him and the said Viswanatha Rupa & Company. It would appear that Viswanatha Rupa & Company had pleaded that a sale made by them was only a second sale, they having purchased the scrap material from him, which was the first sale and hence Viswanatha Rupa & Company is not liable to be assessed to sales tax in respect of the sale of the same materials.


3. It is stated by the petitioner that the entire assessment has been made on a misconception of facts and for a true and proper appraisal of the question in dispute, it is necessary to delve a little into the background of the entire proceedings. In 1967, the petitioner approached certain financiers in Madras to finance the purchase of a wrecked ship grounded on the Madras Coast opposite the Marina Beach. It belonged to a foreign company and the owners of the ship M/s. Diana Maritime Corporation represented by their authorised agents M/s. South India Shipping Corporation Private Limited, were agreeable to sell the grounded ship "ss. Stamatis" as scrap to him for the sum of Rs. 7, 00, 000. Later by negotiation with the owners of the grounded ship, it was reduced to Rs. 3, 30, 000 and the petitioner had also deposited a sum of Rs. 50, 000 with the agents of the owners of the ship for the purpose.


4. Since the petitioner was not in a position to repay the loans which he had taken from these financiers, they filed C.S. No. 135 of 1967 before this Court for various reliefs including a declaration that the said ship "ss, Stamatis" was under a valid pledge to the plaintiffs and that they are entitled to sell the ship or part or parts thereof and recoup themselves for the amount of advance and certain other amounts debitable against him in relation to the pledge and allied transactions. There was also a prayer in the plaint filed in the said suit, C.S. No. 135 of 1967 for a mandatory injunction. There was also a prayer for rendition of accounts.


5. While the suit was pending, this Court appointed a Joint Commissioner in April, 1968, for the purpose of advertising for the purchase of the components of vessel "ss. Stamatis". In pursuance thereof, an agreement was entered into between the petitioner representing New India Traders and M/s. Viswanatha Rupa represented by one Vel Prakash Mukandlal Agarwal, on 12th July, 1968. That agreement was dated 19th July, 1968. M/s. Viswanatha Rupa was one of the tenderers who had tendered for the various components in pursuance of the notification calling for tenders made by the Joint Commissioners appointed for that purpose by this Court. In and by that agreement dated 19th July, 1968, Viswanatha Rupa became entitled to dismantle/break and remove the components of the vessel (falling under items I and II of the tender) at the prices quoted therein and pay for the parts so removed on the basis of the rates quoted. It was also agreed that the said Viswanatha Rupa & Company shall guarantee a minimum of Rs. 5, 57, 000 and any shortfall in the realisation. It was also agreed that the said Viswanatha Rupa & Company shall pay the value of the articles before removal, provided that he shall not be bound to make any payment until the value of the removal effected exceeded Rs. 5, 57, 000. Any surplus over the sum of Rs. 5, 57, 000 is subject to clause 11 of the agreement dated 19th July, 1968. The petitioner undertook to complete the removal of the dismantled portions not included under heads of IX in the tender within 45 days from the date of the order of the court allowing the commencement of the operations on the ship. It is also stipulated that in the event of his entrusting the said Viswanatha Rupa with that work, the petitioner shall intimate to that effect within three weeks of the order of the court. On the failure of either of the contingencies, Viswanatha Rupa & Company shall have the right to remove and deal with these items in the same manner as other articles. Since there has been failure on his part in regard to the aforesaid conditions, M/s. Viswanatha Rupa had exercised the right reserved in them under clause 11 of the said agreement. The assessing authority has treated the exercise of that right by Viswanatha Rupa & Company as a sale by him in respect of that portion of the materials, which he has removed and sold elsewhere. If Viswanatha Rupa has treated that transaction as a first sale and entered so in his books of account thereby acquiring the status of a second sale to avoid his liability for assessment to sales tax as a first sale, the petitioner cannot be held responsible for the erroneous or dubious entries made by M/s. Viswanatha Rupa & Company in their accounts. He shall not be mulcted with a levy for no fault on his part.


6. As stated already, that transaction came to light while the Sales Tax Appellate Tribunal was disposing of an appeal preferred by M/s. Viswanatha Rupa & Company. They seemed to have objected that they were not liable to be taxed on a turnover of Rs. 80, 258.88, which according to them represents a sale by him to them of scrap material. On the basis of that representation, a notice was issued to the petitioner by the assessing authority and in answer thereto it had been pointed out to the assessing authority that the petitioner had not sold any material to Viswanatha Rupa & Company to attract the provisions of the Sales Tax Act to be assessed on the basis of the alleged first sale by him. However, that objection did not impugn the assessment order being passed against the petitioner.


7. The petitioner had not received the assessment order dated 28th March, 1974 relating to the assessment year 1969-70. He came to know of the assessment order when he was prosecuted before the IX Metropolitan Magistrate, Madras, for non-payment of the tax to which the petitioner was said to have been assessed. On receipt of the summons, the petitioner obtained a certified copy of the order of assessment dated 28th March, 1974. By reason of the non-service of the order of assessment on him as required under the law, the petitioner has lost his right of appeal to the Appellate Assistant Commissioner to whom an appeal would lie in the normal course within 30 days from the date of receipt of the order of assessment. It is submitted by the petitioner that for no fault on his part, the only remedy available to him is to approach this Court and invoke its jurisdiction under article 226 of the Constitution of India for the relief sought.


8. The department has now initiated recovery proceedings for the realisation of a sum of Rs. 2, 407.65 assessed as tax payable under the impugned order as stated by the petitioner.


9. In the counter filed on behalf of the respondent sworn to by the Commercial Tax Officer, Mandaveli Assessment Circle, it is, inter alia, contended in paragraph 2 as follows :



"The revision of assessment made in the petitioner for the year 1968-69 on addition of turnover of Rs. 4, 02, 547.59 made under section 55 read with section 16(2) of the Tamil Nadu General Sales Tax Act, 1959 being the sale of scrap material dismantled from the grounded ship "ss. Stamatis" at Madras shore which was purchased by the petitioner M. J. Durairaj, sole proprietor of New India Traders to M/s. Viswanatha Rupa & Company, Madras-1, is under challenge. It is submitted that the Sales Tax Appellate Tribunal, while disposing of the appeal in its T.A. No. 208/72 dated 25th September, 1979, pertaining to M/s. Viswanatha Rupa & Company, Marina Beach, Madras, had observed that Viswanatha Rupa & Company had purchased iron scrap to a tune of Rs. 4, 02, 547.59 from the petitioner M. J. Durairaj, 111, Santhome High Road, Madras-28, and they become the second dealer and the sale turnover of Rs. 4, 02, 547.59 effected by the petitioner has to be assessed as first dealer. The petitioner has not come forward with evidence that he had no such transaction in the company mentioned. Hence the assessing authority made the revision in the face of the records and materials available under section 55 read with section 16(2) of the Act on 28th March, 1974. The petitioner was given ample opportunity to prove that he has no transactions with the company mentioned during the year of assessment for 1968-69 on a turnover of Rs. 4, 02, 547.59 being the sale of iron scraps to the said company. In brief he has not proved :


(i) that he has no transactions with M/s. Viswanatha Rupa & Company, Madras-1, during the assessment year 1968-69;(ii) that he is not the first seller of the iron scrap material dismantled from the grounded ship "ss. Stamatis" at Madras shore which was purchased by him from M/s. Diana Maritime Corporation, London;


(iii) that the quantum of turnover of Rs. 4, 02, 547 assessed for the year 1968-69 by any documentary evidence."


10. It is also stated in paragraph 3 as follows :


" In regard to para 3 of the affidavit it is submitted that the assessment and revision were made on valid basis in the instant case. It is not correct to contend that it is based on any misconception. The petitioner himself admits the ownership of the grounded ship on scrap."


11. It is also stated in paragraph 4 as follows :


" With regard to the averments in paras 4 to 6 it is submitted that the following facts are clear from the agreement dated 19th July, 1968 executed between M/s. Viswanatha Rupa & Company, Bombay, and the petitioner M. J. Durairaj of New India Traders :


(i) that the petitioner was the owner of the wreck of the ship "ss. Stamatis" purchased on 11th July, 1967;


(ii) that M. J. Durairaj took a loan of Rs. 2, 80, 000 from D. Monte and four others;


(iii) D. Monte and others filed a suit in C.S. No. 135 of 1967 in the High Court. For the purpose of paying them it became necessary to invite offers for the purchase of the various components of the vessel;


(iv) the High Court appointed Joint Commissioners for the purpose of advertising, for the purpose of disposal of the components, etc., of the vessel, for the purpose of paying these creditors;


(v) in pursuance of this purpose, an agreement was entered into between Viswanatha Rupa & Company and M. J. Durairaj and a scheme of arrangement adopted;


(vi) M/s. Viswanatha Rupa was to dismantle and break and remove the components of the vessel at the prices mentioned in the first and second schedule to the agreement, the rates were also quoted in the schedule;(vii) the appellant guaranteed a minimum sum of Rs. 5, 57, 000 to M. J. Durairaj, out of which Durairaj, was entitled to receive a sum of Rs. 37, 000 subject to the order of the court;


(viii) the weight of the materials were to be certified by the Commissioners appointed by the High Court;


(ix) the other details show that the deliveries by the Commissioners were effected on behalf of Durairaj to Viswanatha Rupa & Company.


The schedule to the agreement contained details of scrap machinery, etc., with precise details. The nature of the article whether it is scrap or not can be easily ascertained with reference to the entries in these schedules.


The agreement cited indicates a transfer of property by way of sale from Durairaj, as per supervision of the Commissioners to the appellant, i.e., Viswanatha Rupa & Company.


The Commissioner filed before the court a statement showing the goods delivered by him with reference to the above agreement. This list also refers the items in the above schedule. The goods were also purported to have been delivered to Viswanatha Rupa & Company. Thus, it is found that the petitioner had effected sales of the items involved through the appointment of the Commissioners for supervision to Viswanatha Rupa & Company by way of transfer of property involving sale."


12. It is also stated in paragraph 5 as follows :


" This Honourable Court disposed of applications, 2778/71, 2779/71, 2780/71, 2803/71, 566/72, 567/72 in C.S. No. 136 of 1967 dated 19th April, 1972. The following extract of the order will make abundantly clear that the transaction is only sale. The petitioner herein is the applicant in the above applications and first respondent in the suit. The abovesaid Greek ship 'ss. Stamatis' was purchased by the applicant for a certain sum. He had deposited as an advance only a small portion of the sale consideration and as he had no further funds, had to enter into financial arrangements with the plaintiffs in the suit, viz., C.S. No. 135 of 1967. In pursuance of such arrangement, the plaintiffs advanced monies to the applicant (1st defendant) which was paid to the Greek owners of the ship. This advance was on the pledge of the ship itself. As the applicant failed to repay the advance made by the plaintiffs, the latter had to file C.S. No. 135 of 1967, on the file of this Court for declaration that "ss. Stamatis" was under a valid pledge to the plaintiffs, that they were entitled to sell the ship and recoup themselves of the amount advanced to the applicant and for certain other reliefs.The applicant had taken advances from various other financiers for paying the Greek owners of the ship and that was without the knowledge of the plaintiffs in the suit. These financiers were also making claims over the ship in respect of advance made by them. So they were also impleaded as parties to the suit C.S. No. 135 of 1967. The suit was before Ramamurti, J., and at one stage of the applicant and Mr. Padmanabhan, Advocate, were appointed joint receivers of the ship and directions were given to permit visitors on payment of charges. They were making such collection but did not render a proper account of the same. Therefore, the joint receivers were removed. At a later stage, a Commissioner was appointed to receive offers for the sale of the component parts of the ship with the idea of realising money to pay-off the plaintiffs and the other financiers who were also before the court as party defendants. M/s. Viswanatha Rupa & Company who was eventually impleaded as the 7th defendant in the suit (the respondent in all these applications) made the highest offer for purchasing the component parts of the ship and it was ultimately accepted. The respondent entered into an agreement by which it had to deposit a sum of Rs. 5, 57, 000 apart from paying a sum of Rs. 80, 000 to the applicant. The price of the metals of the ship which was to be dismantled was fixed in the agreement and the arrangement was that the respondent was to dismantle the ship and carry away such quantity of metal which would satisfy the sum of Rs. 5, 57, 000 deposited by the respondent. The value of the metal to be carried away by the respondent was to be ascertained by calculating the weight and the rate fixed in the agreement. The abovesaid sum of Rs. 5, 57, 000 deposited by the respondent was to be the minimum guarantee, that is to say, if the various components which the respondent could remove as per the terms of the agreement did not come up to the total value of Rs. 5, 57, 000 as per the rate fixed in the agreement, the respondent would have no claim whatsoever against the applicant. If however to various parts removed by the respondent on dismantling the ship exceed the sum of Rs. 5, 57, 000 in value as per the abovesaid rate, then the respondent can remove further parts only after paying for the excess. Till the total value of the component parts reach the sum of Rs. 5, 57, 000 the respondent had no obligation to pay anything more.Admittedly, in pursuance of the abovesaid arrangement, the respondent engaged its men, dismantled the ship and had been carrying away the metal. This Court appointed Mr. Balagopal, an Advocate, as Commissioner to supervise the work of weighing the component parts dismantled and removed by the respondent in order to avoid any controversy between the parties to the weight of the material carried away by the respondent and the value thereof. The parties, viz., the applicant and the respondent, were directed to be present or send their representatives at the time of dismantling and weighing the component parts and the Commissioner was to give notice to the parties before each weighment. From the above details it is clear that M/s. Viswanatha Rupa & Company made the highest offer for purchase of the component parts of the ship and that it was accepted. This also confirms the sale of goods involving delivery by the receivers on behalf of the petitioner Thiru Durairaj to M/s. Viswanatha Rupa & Company."


13. It is also stated in paragraph 7 as follows :


" For the sale effected by Viswanatha Rupa & Company they issued bills of sale for each of the transactions effected by them. These bills contained the description of the material involved with weight, rate and total consideration. They also refer to the Bill No. of H. C. Commissioner. The contents of the sales bill show that the appellants sold iron scrap, white metal and lead scrap, brass lead scrap, etc. These bills of sale also evidence transfer of property between the appellants and to the relative buyers for an agreed consideration. Such sales are consequently liable for assessment at the hands of the pur

chaser from the petitioner." * 14. The point for consideration is whether there are grounds for quashing the impugned order as prayed for by the petitioner herein. 15. A careful consideration of the contents of the affidavit and the counter-affidavits shows that in pursuance of the arrangement, the respondent engaged its men, dismantled the ship and had been carrying away the metal. This Court appointed Mr. Balagopal, an Advocate, as Commissioner to surpervise the work of weighing the component parts dismantled and removed by the respondent in order to avoid any controversy between the parties to the weight of the material carried away by the respondent and the value thereof. For the sale effected by Viswanatha Rupa & Company, they issued bills of sale for each of the transactions effected by them. These bills contained the description of the material involved with weight, rate and total consideration. They also refer to the Bill No. of H. C. Commissioner. The contents of the sales bill show that the petitioner sold iron scrap, white metal and lead scrap, brass lead scrap, etc. These bills of sale also evidence transfer of property between the petitioner and to the relative buyers for an agreed consideration. Such sales are consequently liable for assessment at the hands of the purchaser from the petitioner. Under these circumstances, the stage of liability is the first point of sale in the State of Madras. The rate of tax applicable is the maximum of 3 per cent. The details in this case clearly show that Viswanatha Rupa & Company obtained the goods by way of purchase from M. J. Durairaj under the supervision of the Joint Commissioners appointed for the purpose. M/s. Viswanatha Rupa & Company in their turn sold the goods to several of their customers. Therefore, the impugned order is correct. There is no infirmity in it. There is no merit in the writ petition. Hence the writ petition is dismissed. In the circumstances of the case, there is no order as to costs.Writ petition dismissed.