2000 (7) TMI 943 - AT - VAT and Sales Tax

Summary

Issues:
1. Dispute over the levy of 2% additional sales tax on a turnover of Rs. 47,79,316 by the Sales Tax Appellate Tribunal.
2. Whether the liability for additional sales tax on transactions for Central Government departments falls on the assessee acting as an agent.
3. Interpretation of section 2(1)(a) of the Tamil Nadu Additional Sales Tax Act, 1970 regarding the liability to pay additional sales tax by a dealer, including the principal, selling or buying goods through agents.
4. Application of legal precedents like Guduthur Bheemappa v. Commercial Tax Officer, India Beedi Leaves v. State of Tamil Nadu, and Cardamom Planters' Association v. Deputy Commissioner of Sales Tax (Law) in determining the liability of the agent for additional sales tax irrespective of the turnover of the principals.

Analysis:
1. The case involved a dispute regarding the levy of 2% additional sales tax on a turnover of Rs. 47,79,316 by the Sales Tax Appellate Tribunal. The Appellate Tribunal confirmed the liability of the assessee in respect of the additional sales tax.
2. The petitioner contended that the assessee acted as an agent for selling scrap of Central Government departments, receiving only a commission for the services rendered. The petitioner argued that the liability for additional sales tax should not fall on the assessee but on the Government Departments themselves.
3. The Tribunal analyzed section 2(1)(a) of the Tamil Nadu Additional Sales Tax Act, 1970, which states that the liability to pay additional sales tax is on a dealer, including the principal, selling or buying goods through agents whose taxable turnover exceeds a specified amount. The Tribunal found that the assessee, as an agent of the Central Government departments, is liable to pay both tax and additional sales tax.
4. Referring to legal precedents like Guduthur Bheemappa v. Commercial Tax Officer, India Beedi Leaves v. State of Tamil Nadu, and Cardamom Planters' Association v. Deputy Commissioner of Sales Tax (Law), the Tribunal concluded that the agent is liable for additional sales tax irrespective of the turnover of the principals. The Tribunal held that the liability of the agent for additional sales tax stands, as per the legal interpretations provided by the Supreme Court and other High Courts. The Tribunal dismissed the tax revision case, upholding the decision of the Appellate Tribunal and ordering that the decision be punctually observed and executed.