9911796707
TMI Blog1989 (9) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant preferred an appeal before respondent No. 2, who having confirmed the assessment, the applicant moved the Commercial Taxes Tribunal in revision which too affirmed the appellate order in regard to the turnover tax (vide annexures B and C, respectively). The Tribunal held in substance that the turnover of each and every principal was liable to be clubbed together in the hands of the applicant which admittedly acted as commission agent for and on behalf of 24 disclosed principals, besides the business done by the applicant on his own account. The authorities below acted in clear violation of law and the principles enunciated by the Supreme Court and different High Courts. Hence, the orders are liable to be set aside. 3.. The main contention of the applicant is that the assessing authority could not club together the turnover of the different principals and fix liability for the aggregate amount on the applicant. In the circumstances, the applicant has prayed for setting aside the impugned orders and for a direction upon respondent No. 3 for fresh assessment according to law and determine the liability under section 6B on the basis of the turnover separately in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws: "'turnover' used in relation to any period means the aggregate of the sale prices or parts of sale prices receivable, or if a dealer so elects, actually received by the dealer during such period after deducting the amounts, if any, refunded by the dealer in respect of any goods returned by the purchaser within such period." The definition is followed by two provisos which are not relevant for our purpose and need not, therefore, be reproduced. 9.. Section 6B imposed the liability to pay turnover tax on every dealer whose aggregate of the gross turnover during the year exceeds Rs. 25 lakhs. The rate of turnover tax payable is laid down in the different clauses of sub-section (3) of section 6B. The rate varies from per cent to 1 per cent depending on the amount of turnover. The higher the turnover, the higher the rate. 10.. Mr. Bose, appearing on behalf of the applicant, contends that the liability of the agent is co-extensive with the liability of the principal and that in no case he can be made liable for an amount larger than that of the principal. Precisely, his grievance is that by clubbing together the turnover of the different principals, he is being made liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rincipal. 13.. It is true that there is no express provision like section 11 of the Andhra Pradesh General Sales Tax Act in the Bengal Finance (Sales Tax) Act, 1941, but that does not, in our view, alter the position under the general law that an agent is an agent qua the particular principal and his liability arises only in respect of that principal. 14.. The learned Tribunal below sought to distinguish this case on the lone consideration that under the Andhra Pradesh General Sales Tax Act, while defining a "dealer", the expression "on behalf of any principal", is used while that expression is wanting in our Act. We see no point in distinguishing that case on that consideration alone. In the BFST Act, 1941, the expression "dealer" includes a commission agent who has authority to sell goods belonging to "principals". The use of the expression "principals" instead of "any principal or principals", makes no difference whatsoever, as regards the status, rights and liabilities of the agent vis-avis the principal or principals, if there be more than one. Therefore, the reasoning given by the learned Tribunal is hardly tenable. The learned Tribunal, after distinguishing the case refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the view expressed in the above decisions. 18.. Mr. Chakraborty for the respondents, however, argued that the rights and obligations of an agent and principal under the general law, are determined by their contractual relationship as determined by the Contract Act and that the statutory liability of the agent as dealer has to be considered independently of the contractual relationship. This argument appears to us to be of no substance. In the case of State of Madras v. Cement Allocation and Co-ordinating Organisation, reported in [1972] 29 STC 114, the Supreme Court observed that under the general law an agent merely represents his principal and acts for him. This rule must hold good even under the Madras General Sales Tax Act, unless otherwise provided therein. The fact that for the purpose of that Act the agent is considered to be a dealer does not alter the legal position in other respects. He merely steps into the shoes of the principal. He is entitled to the same exemptions as his principal would have got had he dealt with the concerned goods himself. The provision of the Act under which agents are considered as dealers does not convert an agent into a principal. 19.. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent in West Bengal for a non-resident dealer engaged in the business of selling goods in West Bengal. We do not see how, if the explanation still existed, it would have altered the position in this case. That apart, we need not draw any inspiration from the possible interpretation or effect of an explanation which has been deleted as far back as in 1954. 24.. Mr. Chakraborty also argued that factually the agent would not stand to lose anything even if the sum total of the turnover of the different principals is taken together and assessed upon the agent-dealer because, the agent may be entitled to reimbursement from the principals. This argument also does not appear to be sound. The question may be raised as to the amount for which the principal or principals may be required to reimburse the agent. It is quite likely that the individual principal's turnover may not exceed the limit so that individually he may not be liable for tax. But because the aggregate of the turnover of the different principals is computed for assessing the agent, he may be called upon to pay tax at the highest rate as in this case, while he may not be entitled to ask for reimbursement from the individ ..... 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