1969 (1) TMI 57 - HC - VAT and Sales Tax

Summary

Issues:
1. Incorrect assessment of sales tax on a commission agent.
2. Jurisdiction of Deputy Commissioner in revision petition.
3. Interpretation of the Mysore Sales Tax Act, 1957 regarding sales transactions by an agent on behalf of principals.

Analysis:
1. The petitioner, a commission agent selling chillies on behalf of principals, was erroneously assessed for sales tax by the assessing authority, treating him as the buyer instead of the seller. The assessing authority relied on an incorrect interpretation of the Mysore Sales Tax Act, deeming two independent transactions to have occurred. However, the agent had accounted for the sales made on behalf of his principals, which did not warrant such treatment under the Act.

2. The Deputy Commissioner and the Tribunal erred in dismissing the revision petition based on jurisdictional grounds. The Tribunal wrongly held that the Deputy Commissioner could not exercise revisional jurisdiction on a petition filed by the petitioner. The High Court clarified that even under the amended Act, the Deputy Commissioner could act on such petitions, presuming he exercised his revisional powers suo motu.

3. The assessing authority's misinterpretation of the Act led to the erroneous assessment of sales tax on the petitioner. The authority incorrectly applied sub-clause (iii) of the 3rd explanation to section 2(t) of the Act, deeming two transactions to have taken place due to the agent's failure to fully credit the principal's account. However, the Act only allows such dichotomy if the agent fails to provide a full account to the principal, not merely for failing to credit the full realizations. The High Court set aside all previous orders and directed the assessing authority to rectify the assessment in favor of the petitioner.