9911796707
TMI Blog1954 (11) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the plaintiff was not a dealer liable to be taxed under the Madras General Sales Tax Act (hereinafter called the Act). The suit was filed in the following circumstances. The plaintiff is a manufacturer of a tonic called Gripe Tonic and also an importer of Eucalyptus oil. He does not sell these articles directly to customers, but has constituted Messrs. V. S. Narayana Sons as his agents for the sale of the Gripe Tonic and the Eucalyptus oil on commission basis. The Commercial Taxes Department assessed the plaintiff on the turnover of the commission agents in respect of these goods on the basis that the agents became liable to be taxed for the reason that they failed to take out a licence under section 8 of the Act, and that did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 9 of the Act. The trial court decreed the suit in part, i.e., in regard to the refund of the tax paid by the plaintiff as in its opinion, the tax having already been collected from the agents who were not dealers within the meaning of the Act, it could not be collected once again in respect of those very transactions from the plaintiff. He dismissed the suit as regards the compounding fee having come to the conclusion that the plaintiff was a dealer and as such bound to submit the returns of the turnover and having failed to do so, he incurred the liability under section 16 of the Act. On appeals filed by the aggrieved parties, i.e., one by the plaintiff and the other by the State Government against this judgment to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Provincial Government of Madras v. Neeli Veera- bhadrappa(2) could be upheld on the facts of the case as it was found that the persons sought to be taxed were merely brokers and not commis- sion agents, but the proposition stated by the learned judges in broad terms that commission agents were not dealers could not be accepted. In view of that ruling, it must be found that a commission agent is a dealer, and if the tax was collected from him it was properly done. There could therefore be no question of the tax being paid twice over if the plaintiff could be regarded as a dealer. The real question is whether he could be described as a dealer. Section 2 (b) defines a dealer as any person who carries on the business of buying or selling goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relationship between them is one of debtor and creditor. If authority is wanted for this position, it is furnished by Kalyanji v. Tikaram(1), where the position of a commission agent is discussed in full by Vivian Bose, J. (as he then was). The following observations are very apposite in this connection: "Commission agents are of course agents up to a point and to that extent they stand in a position of active confidence towards their principals, but beyond that they are not agents in the real sense of the term and the relationship between the parties from then on is one of debtor and creditor. The test to my mind is this: does the commission agent when he sells have authority to sell in his own name? Has he authority in his own righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les made by them. It follows that the tax collected from the plaintiff was illegal and has to be refunded. Consequently the decree under appeal has to be confirmed, though for different reasons. Second Appeal No. 2248 of 1950 is therefore dis- missed without costs. Now coming to Second Appeal No. 2100 of 1950, this appeal must be allowed applying the principle stated above. As mentioned supra, the reason for demanding the compounding fee is that he failed to submit a return of his turnover as required under section 9 of the Act. Section 9(1) enacts: "Every dealer whose turnover is ten thousand rupees or more in a year shall submit such return or returns relating to his turnover in such manner, and within such periods as may be prescribed." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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