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TMI Blog1962 (4) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the sellers: "He (the petitioner) is acting as a commission agent for the sale of cured arecanuts. The curers bring the commodity to the market and entrust the same with the appellant (petitioner). Usually the appellant advances money to these curers sometimes before the goods are actually brought to the market and at other times when the goods are brought and entrusted with him for sale. Appellant has a lien on the goods to the extent of the advances and has also a right to pledge or dispose of the same for realising the advances with interest and other charges agreed upon. Purchasers who are generally from outside the Kerala State go over to the market. According to the appellant either the purchaser or his broker will be present at the time of the transactions. In many cases the curers will also be present. Even if they are not present appellant will have authority to sell on their behalf at reasonable prices already intimated. The goods offered for sale will be inspected by the intending purchasers or their brokers and then offers and counter-offers by conventional and secret modes of communication by symptoms are made through the appellant and the final rate will be fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this section referred to as a 'non-resident'), the provisions of this Act shall apply subject to the following modifications and additions, namely: (i) In respect of the business of the non-resident, his agent residing in the State shall be deemed to be the dealer. (ii) The agent of a non-resident shall be assessed to tax or taxes under this Act at the rate or rates leviable thereunder, in respect of the business of such non-resident 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)." The first question which arises is whether the petitioner was the agent of the non-resident buyers with authority to buy as found by the Tribunal. The finding of the Tribunal is based almost entirely on the cheettus or memos like exhibit P-3(1), signed by the buyers after the purchases were completed. The memos are not by themselves the conferment of authority on agents like the petitioner except perhaps of an authority to pay, and so they constitute but an item of proof of the authority to buy. Having been brought into existence after the purchases were made, the transactions themselv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summary on the course of business. The fact cannot be overlooked, that in most cases the buyers themselves and in others their brokers, personally inspect the goods and attend the purchase. In the generality of cases the sellers too are present. Offers and counter-offers are made between the sellers and the buyers or the brokers of the latter, through the petitioner and others like him. The petitioner is but the medium or the conduit pipe and has no power to strike the bargain on behalf of the buyers, though when the sellers are not present he has authority to sell on their behalf and presumably offers are then made to him by the buyers or their brokers. That the petitioner acts as the medium and in that sense negotiates the transaction, that he finances the buyers where they do not make payment of the price forthwith and settles accounts with the sellers on their behalf and that he arranges for the weighing, drying, packing and transport of the goods, while useful to establish his agency in certain respects or to prove that he is concerned in the business of the buyers, do not point to an authority on behalf of the non-residents to buy. In the face of this evidence, memos like P- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell. Short of striking the actual bargain which may be done by the principal directly, an agent may do other acts on behalf of the principal, such as paying or receiving the price, storing, preserving or sorting the goods, packing or transporting them, and in that manner, be concerned in his business. It was pointed out for the petitioners that on this extended interpretation of the term, agents may be in a multitude to choose from. That is a possibility which could not wholly be avoided in the case of a buying or selling agent too, say, where the non-resident employs as many such agents as there are transactions which together go to constitute his business. It seems to us that there is no warrant on the terms of the section, for limiting its operation to an agent who does the buying or selling. On this point, speaking with respect, we find ourselves in agreement with the view taken in more than one Bench decision of the Andhra Pradesh High Court. In G. Gilda Textile Agency, Vijayawada v. Government of Andhra Pradesh [1959] 10 S.T.C. 368., there were three categories of transactions the second of which is relevant. The petitioners in revision before the High Court, who were assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had acted as their agents and in transmitting offers and counter-offers, he had acted as a medium without authority to buy, yet he may be said to have negotiated the purchases in the above manner, and what is more, paid the price and settled accounts with the sellers, was in custody of the goods from the time of the completion of the purchases, and arranged for the drying, packing and transport, all on behalf of the buyers. These are good grounds for holding that even though the petitioner lacked the authority to buy, he was an agent concerned in the business of the non-resident buyers. His residence in the State of Kerala was not disputed. This is sufficient to attract section 18 of the Act. The tribunal was not therefore justified in remanding the case. On the finding that the petitioner was not the buying agent, it was conceded by the learned counsel for the petitioner that the contention that the purchases by the non-resident buyers were in the course of inter-State trade or commerce cannot stand and does not arise. We therefore do not deal with it. It remains to consider the point taken in T.R.C. 109 of 1960 on behalf of the department, that the petitioner is not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them on that turnover; on the contrary, for the petitioner it was urged, that all that need be proved is that the amounts formed part of the turnover of the principals. A licence under section 9 implies, that for an agreed commission or brokerage an agent buys or sells goods on behalf of known principals specified in his books of account in respect of each transaction. It enables the agent to claim exemption from tax in respect of his transactions, subject to two conditions which alone are material to the present case, first, that they were carried out in accordance with the terms and conditions of the licence, and second, that the requirements of the first proviso to section 9 were fulfilled. The latter, with slight immaterial variations, have also been incorporated, as prescribed by Form XI of the General Sales Tax Rules, 1950, as a term and condition of the licence. The interpretation of the first proviso is beset with difficulty. The use of the term "turnover of the principals" as distinguished from "turnover of dealers" is far from clear and does not fit in with section 2(k) of the Act which defines turnover in relation to dealers only. But the real difficulty so far as thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing officer by making it the subject of assessment. Giving "turnover" a wider meaning, but consistently with its definition, the inclusion in the turnover by the principal may also be in his books of account which form the most important evidence in assessment proceedings. The burden of proving the exemption, which is cast on the agent by the last proviso to section 9, is not necessarily an impossible burden to discharge. Section 17 of the Act authorises any officer empowered by Government in that behalf for the purpose of the Act to require a dealer to produce before him, his accounts and other documents and to furnish any other information relating to such business. Rule 40 of the rules aforesaid empowers the assessing authority to require any person whose evidence is considered necessary to appear before him and give evidence on oath or affirmation. By rule 41, the assessing authority is given all the powers conferred on a Court by the Code of Civil Procedure for securing the attendance of persons and the production of documents and rule 42 authorises him to issue summons for the purpose. The petitioner did not seek any further opportunity for adducing proof. In the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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