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2013 (1) TMI 711 - MADHYA PRADESH HIGH COURTInterpretation of Explanation (c) of section 2(u) of the Madhya Pradesh Value Added Tax Act, 2002 - Held that:- The real object of the Explanation is to prevent the misuse by the assessee of the relationship of principal and agent for the purpose of evading tax. It is impossible to accept the contention put forward on behalf of the appellant that the Explanation has converted what, in fact, is not a sale into a sale for the purpose of assessment to sales tax. In the present case, M/s. Rahul Pharma is an agent of the petitionercompany, which is clear from the agreement (annexure P/1). It only supplies the goods to the authorized dealer of the company or supply the goods to the buyer and for the aforesaid purpose it takes commission of three per cent. It means that the agent, M/s. Rahul Pharma, used to deliver the goods not as its own property but as the property of the principal, who continues to be the owner of the goods and therefore liable to account for the sale proceeds. It is not a "sale" as interpreted by the honourable Supreme Court, hence, the petitioner is not liable to pay tax. Petition of the petitioner is disposed of with the directions that the delivery of the agent of the petitioner to the buyer or to the authorized distributor shall not be taxed under the provisions of the VAT Act by treating it as an independent sale. The taxation authorities shall calculate the tax liability of the petitioner accordingly
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