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TMI Blog1966 (10) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court was delivered by RAMASWAMI, J .-Civil Appeals Nos. 976 and 977 of 1965 are brought against the judgment of the Mysore High Court dated the 24th January, 1962, in Civil Revision Petitions Nos. 32 and 33 of 1961. Civil Appeal No. 978 of 1965 is presented against the judgment of the Mysore High Court dated the 29th January, 1962, allowing a writ petition of the respondent, viz., Writ Petition No. 543 of 1960, filed against the order of the Commercial Tax Officer, Additional Circle, Mangalore, South Canara. The respondents in these appeals were firms of commission agents having their place of business in Mangalore City in South Canara within the new State of Mysore. The respondents had been dealing mainly in areca. Their principals in areca trade were residents of Malabar District and Kasargod Taluk in the former State of Madras. Every year the respondents used to take out licences under section 8 of the Madras General Sales Tax Act, 1939 (Madras Act No. 9 of 1939) (hereinafter referred to as the Act). So, for the year 1956-57, the respondents took out licences in respect of their dealings as com- mission agents. On 1st November, 1956, the States Reorganisation Act (Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he burden of proving that a transaction is exempt, by virtue of this section, from the tax or taxes payable under section 3, shall be on the licensee." With effect from the 1st October, 1956, the Madras Legislature added two more provisos to section 8 of the Act. Of the two provisos the last which is material to this case states: "Provided also that the agent of a person or firm carrying on business outside the State shall not be eligible for a licence under this section in respect of his transactions made on behalf of such person or firm." Rule 5(1)(f) of the Madras General Sales Tax Rules, 1939, framed under the Act provides as follows: "Every person who........................................................... (f) for an agreed commission or brokerage, buys and/or sells goods of any description on behalf of known principals shall, if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of taxation only at a single point or of taxation at the rate specified in section 5, submit an application in Form I for a licence in respect of each of his places of business to the authority specified in sub-rule (2) so as to reach him not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in which the agent is concerned, irrespective of the amount of the turnover of such business being less than the minimum specified in section 3, sub-section (3). (iii) Without prejudice to his other rights, any agent of a non- resident who is assessed under this Act in respect of the business of such non-resident may retain out of any moneys payable to the non- resident by the agent, a sum equal to the amount of the tax or taxes assessed on or paid by the agent. (iv) Where no tax would have been payable by the non-resident in respect of his business in the State by reason of the turnover thereof being less than the minimum specified in section 3, sub-section (3), he shall be entitled to have the amount of the tax or taxes paid by his agent refunded to him on application made to the assessing authority concerned, or where more than one such authority is concerned, to such one of the authorities as may be authorised in this behalf by the State Government by general or special order. (v) Such application shall be made within twelve months from the end of the year in which the payment was made by or on behalf of the non-resident of the tax or taxes or any part thereof." "Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents that in view of the Adaptation Order we have to read the provisions of the Act and the Rules framed there- under as adapted. It was, however, argued that clause 4 of the Mysore Adaptation of Laws Order does not apply to the interpretation of clause 4 of Form V of the licence, and so, the word "State" mentioned in that clause cannot be construed as meaning "Madras Area". We are unable to accept the argument of the respondents as correct. We shall assume that the licence already issued to the respondents is not "law" within the meaning of clause 4 of the Mysore Adaptation of Laws Order. Even on that assumption, the word "Madras State" in clause 4 of Form V should be interpreted in the context of clause 4 of the Mysore Adaptation of Laws Order and the adapted provisions of the Act and the Rules framed thereunder. It is not disputed on behalf of the respondents that Form V is a part of the Rules framed and therefore it is "law" as contemplated in section 120 of the States Reorganisation Act, 1956, and that in clause 4 of Form V we must read the words "Madras Area" in place of the word "State". But the argument was stressed that the word "State" in the licence already issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 8, however, provides that if the commission agent obtains a licence under the section he could exclude from his turnover all sales specified in his accounts on behalf of known principals that are carried out in accordance with the terms of his licence. This, however, was subject to certain provisions one of them being that the amounts of sales in respect of such transactions should be included in the turnover of the principals except when they are covered by exemptions granted under the Act. If section 8 is read along with clause 4 of Form V, it is plain that no licence can be granted to the commission agent with regard to dealing in goods of non-resident principal. The provisions of section 8, therefore, cannot apply in this case but the respondents are liable to be assessed under section 14-A of the Act with regard to transactions effected on behalf of the principals residing either in Kasargod Taluk or in places in the former District of Malabar for the period between 1st November, 1956, and 31st March, 1957. For these reasons, we hold that the judgment of the Mysore High Court in these appeals should be set aside and the cases of the respondents should be remanded to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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