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TMI Blog1972 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... s, that they have not sold goods to anybody except themselves and that, therefore, the transactions do not fall under sales liable to tax. The Board of Revenue examined the order of the Appellate Assistant Commissioner with the connected records and found that the assessees were the selling agents of agriculturists on commission basis, that they had also at times effected purchases of turmeric for resale on their own account from the agriculturist-principals, that out of the turmeric received from the agriculturists for sale on commission basis, the assessees have appropriated to their own account the turmeric valued at Rs. 1,23,878.50 during the assessment year, and that, therefore, the assessees are liable to tax on the sales effected by them as selling agents of the agriculturist-principals to themselves, even though they had in fact paid tax on their own sales of turmeric to third parties. According to the Board of Revenue, the transaction by which the turmeric reached the hands of the third parties involved two sales, one by the agriculturists to the assessees and the other by the assessees to third parties, and that though the latter sales effected by the assessees to third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to tax on the sale proceeds of the turmeric. But the question is whether the assessees who have acted as selling agents of the said agriculturist-principals could claim the said exemption on the ground that the turnover having been exempted from tax in the hands of the principals, it should also be exempted in the hands of the assessees, their selling agents. It is true that under the general law the liability of an agent is co-extensive with that of the principal. But this rule is subject to the provisions of the Tamil Nadu General Sales Tax Act with which we are concerned. The statute specifically brings in a commission agent who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal within the definition of a "dealer" in section 2(g). "Turnover " as defined in section 2(r) takes in the aggregate amount for which goods are bought or sold or supplied or distributed by a dealer, either directly or through another, on his own account or on account of others. Therefore, the statute contemplates a commission agent having a separate turnover of his own as a dealer even though the principal may or may not have turnover of his own. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf under the statutory definition of "dealer" given in the 1959 Act, the exemption under the proviso to section 2(r) can be granted only if the agricultural produce is grown by the agent himself or grown on a land in which he has an interest, whether as owner, etc., and so long as the produce does not satisfy this condition, the benefit of the proviso will not be available to the agent. The correctness of the above decision was questioned before a Full Bench of this Court in Deputy Commissioner of Commercial Taxes v. Anantharama Nadar Sons(2) and Veeraswami, C.J., speaking for the Full Bench, had expressed the view that where an agent himself, as a commission agent, is also a dealer, on a strict reading of the proviso to section 2(r), he would not be entitled to the exclusion from the turnover of sales of agricultural produce, unless he had himself grown the produce on his own land or on land in which he had an interest, and that "turnover" as defined in section 2(r) is relatable to the sales effected by the dealer and the proviso should naturally be taken to be concerned with the turnover in his hands as is clear from the language of the proviso and that the word "himself" in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the agent is a dealer in respect of each of the principals. In K. Venkata Ramana v. State of Andhra Pradesh[1969] 24 S.T.C. 367., again the Andhra Pradesh High Court reaffirmed its view that even: after the amendment of the Andhra Pradesh General Sales Tax Act, 1957, by Act 5 of 1968, making the agent liable in respect of the transactions of several principals irrespective of the liability of the principals, the liability of the agent continues to be based on the principle of representation, that is, whether he is a dealer in respect of all the principals or one principal, his liability is co-extensive with that of the principal, and that the amendment which does not recognise the principle of representation and seeks to fix the liability on the agent for the turnover of several principals as if it is the turnover of the agent irrespective of whether each of the principal was liable or not is not valid. Even in the above decision the effect of the definition of "turnover" on the commission agent's transactions have not been considered. Reference was also made to the decision of the Supreme Court in State of Madras v. Cement A. C. Organisation[1972] 29 S.T.C. 114 (S.C.)., whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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