9911796707
TMI Blog1969 (4) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... consolidated one relating to two assessment years, viz., 1960-61 and 1961-62 and the question of law set out above is common to both the assessment years. M/s. Suraj Prasad Gauri Shanker of Varanasi (hereinafter referred to as the "assessee") carries on the business of commission agency and is also a dealer in oil-seeds and kirana. In respect of the assessment years in question a dispute arose between him and the Sales Tax Officer as to the former's liability to pay sales tax on the turnover of khandsari sugar sold by him as commission agent on behalf of his principals, who manufacture khandsari sugar in Uttar Pradesh. The assessee's contention was that under Notification No. S.T.1365/X-990-1956, dated 1st April, 1960, the turnover of kha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as mentioned against each goods in column 5 of the Schedule hereto: SCHEDULE Sl. No. Name of goods. Circumstances under which to be taxed. Point of sale. Rate of tax 1 2 3 4 5 * * * * * 40. Khandsari sugar on which additional excise duty is not leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, or if leviable, it has specifically been exempted from such levy. (a) (b) If imported from outside Uttar Pradesh. If manufactured in Uttar Pradesh. (a) (b) Sale by importer. Sale by Manufacturer. 2 paise per rupee. Do." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased, shall be deemed to be a dealer for the purposes of this Act." Section 2(i) defines "turnover" in the following terms: "turnover means the aggregate amount for which goods..........are sold..........either directly or through another on his account or on account of others.........." From a reading of the provisions set out above the scheme of the Act appears to be to tax a person who carries on the business of buying or selling goods on the aggregate of the sales effected by him during an assessment year, either directly or indirectly, which means that the sales effected by a person through a commission agent would also be treated to be a part of his turnover upon which he would be liable to pay tax. A person who carries on the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escape his liability by showing that the tax has been paid by his principal. Therefore, if we were to be guided by the charging section and the definitions reproduced above, the levy of tax upon the assessee could not be challenged. The question, however, arises as to what is the effect of the notification of 1st April, 1960. That notification, in our opinion, has materially altered the situation. Under that notification khandsari sugar manufactured inside the State is liable to tax only at one point, viz., its sale by the manufacturer. The sale by the manufacturer may be direct or through a commission agent and in either case he alone would be liable. In respect of the commodities not covered by the notification the department may have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Chapter XV. Sections 160 to 166 in that Chapter deal with representative assessees. Under those provisions tax is levied upon and recovered from an agent of a non-resident assessee, from the guardian or manager of a minor, lunatic or idiot, from Court of Wards, Administrator-General, Official Trustee, receiver or manager appointed by a court and from a trustee appointed under a trust. They are all called representative assessees and tax is levied and collected from them in respect of the income received by them on behalf of persons whom they represent. But the liability of such representative assessees is vicarious and is always coextensive with the liability of the persons whom they represent (section 161). A provision has been made ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, suppose khandsari sugar is pledged with a bank by its manufacturer and it becomes necessary for the bank, in order to realise its debt, to sell the sugar. Such a sale indeed would be the first sale but would not be taxable in the hands of the bank because the bank cannot be said to be its manufacturer. The decision of the Andhra Pradesh High Court in The State of Andhra Pradesh v. T.R. Somaraju(1) relied upon by the learned Standing Counsel is distinguishable. In that case jaggery was liable to sales tax only at the stage of first sale in the State. Under the notification with which we are concerned, the sale of khandsari sugar is liable to tax not at the point of first sale, but at the point of sale by the manufacturer. We, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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