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TMI Blog1989 (1) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1973-74 on a net turnover of Rs. 4,46,811.19. An appeal was preferred by the dealer questioning, inter alia, the levy of tax on a turnover of Rs. 72,850.46. The Appellate Assistant Commissioner set aside the assessment with respect to the above turnover. Thereupon, the Deputy Commissioner in exercise of his suo motu powers of revision under sub-section (2) of section 20 revised the said appellate order in so far as it held that the turnover in a sum of Rs. 72,850.46 is not exigible to tax. The dealer thereupon filed an appeal to the Tribunal. The Tribunal held, following the decision of this Court in Irri Veera Raju v. Commercial Tax Officer, Tadepalligudem [1967] 20 STC 501 that the Deputy Commissioner was not right in set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es on the business of buying, selling, supplying or distributing goods directly or otherwise, whether for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, and includes- (iv) a commission agent, a broker, a del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal." Section 5(1) as it stood at the relevant time provided: "Every dealer (other than a casual trader and an agent of a nonresident dealer) whose total turnover for a year is not less than Rs. 25,000 and every agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to tax. The department did not agree. When the matter came to this Court, it was held that the words "on behalf of any principal" occurring in the definition of dealer in section 2(1)(e)(iv) of the Act indicate that the agent is a dealer in respect of each of the principals and that he is deemed to be as many dealers as there are principals. It was held that the total turnover of the petitioners in respect of several principals could not be computed for assessing them when, in fact, the turnover of each one of the principals was below the taxable limit. In other words, it was held that inasmuch as the liability of the agent was coextensive with that of the principal, he cannot be made liable where the principal himself is not liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agent liable irrespective of the fact that the principal was not liable on the ground that his turnover was below the prescribed limit. In other words, the turnover of the agent was made relevant. The amended section 11 was however struck down by this Court in Konathala Venkata Ramana v. State of Andhra Pradesh [1969] 24 STC 367 as discriminatory. This Court reiterated the principle that the agent's liability is coextensive with that of the principal and since section 11 is only a machinery section and not a charging section, the agent cannot be made liable without making the principal liable. It was held that the amended section 11 violates article 14 of the Constitution. After this decision, the Legislature again stepped in and enact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a case, in respect of other general goods, the principal would not be liable unless he sells goods above the prescribed limit, if so, the agent would also be not liable. The turnover of the agent comprising sales on behalf of several principals cannot be clubbed together and he cannot be made liable. We do not think that the words added in the definition are sufficient to bring about the said result. We are, therefore, of the opinion that the Tribunal was right in holding that the said turnover in a sum of Rs. 72,850.46 relating to general goods and representing the sales effected by the dealer as agent on behalf of several principals cannot be brought to tax inasmuch as the sale on behalf of each principal was below the prescribed lim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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