TMI Blog1963 (5) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... . For its labour in arranging sale it charges commission from the seller and the buyer both. It also sells goods on its own account as a dealer. It obtained a licence as a commission agent on 26th November, 1949. It maintains accounts only of the business carried on by it as a dealer, according to which it sold oil seeds of the turnover of Rs. 2,903-4-6 and foodgrains etc. of the turnover of Rs. 9,038-6-3. It did not maintain any accounts of the transactions carried on by it as a commission agent, but only noted the commission charges received by it. The total amount of commission received by it during the assessment year was Rs. 3,850. The rate of its commission was 1% and therefore, the turnover worked out at Rs. 3,85,000. The Sales Tax Officer estimated that Rs. 96,000, approximately onefourth of the total turnover, was the turnover of oil seeds and split up this amount into two amounts, one of Rs. 20,000 as representing the turnover for the period 1st April, 1949, to 25th November 1949, and the balance as representing the turnover for the remaining period 26th November, 1949 (the date on which it obtained a licence as a commission agent) to 31st March, 1950. He then assessed it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee admittedly is a commission agent and the question is whether it is a kachcha arhatia or a pakka arhatia. It claimed to be a kachcha arhatia, whereas it has been assessed as a pakka arbatia, and the first question is whether there was any evidence in support of the finding that it is a pakka arhatia. It has been found that it records transactions carried on by it as a commission agent as if it purchased goods from sellers and then sold them as its own goods to buyers. It pays sellers the price of the goods and receives from buyers their price. Selling goods is not simultaneous with receiving them. These facts can legally support the finding that it buys and then sells goods and does not merely bring buyers into contact with sellers and arrange transactions between them. It may be that it receives from buyers what it pays to sellers and that it receives commission from buyers and sellers both; these facts might show that it acts only as an agent bringing buyers and sellers into contact with each other and promoting direct transactions between them, but question No. (1) is whether there is any material to support the finding that it acts as a pakka arhatia and not whether there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that have been carried out after the grant of a licence, provided they have been carried out in accordance with its terms and conditions. All transactions carried out by the assessee since 26th November, 1949, have been exempted and none of the transactions carried out in the prior period could be exempted at all, because they could not be said to have been carried out in accordance with the terms and conditions of the licence, when it did not exist then. Section 21 provides that "if the licence fee has escaped levy or has been assessed at too low a rate in any year, the assessing authority may ..... levy the correct amount of licence fee". Rules made by the State Government in respect of licence fees are rules 28 to 38, their substance is that a dealer desiring to avail himself of the concession provided in section 6 should submit an application for a licence that a licence issued takes effect from the date of the presentation of the application, that the licence is valid only for the year ending on 31st March of the assessment year, that the dealer will remain liable to assessment for the period for which no licence has been granted, that he will have to pay a certain fee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular period but on the net turnover, i.e., the net turnover of the whole year. The amount of the licence fee is fixed according to the net turnover, and as the latter does not depend on the date of the licence, the amount does not vary with the date of the licence. It does not matter on what date the licence takes effect; the fee to be paid is the same. The licence granted to the assessee took effect from 26th November, 1949, but this date is relevant only for deciding which transactions should be exempted from the tax under section 6. All transactions carried out in accordance with the terms and conditions of the licence after 25th November, 1949, were to be exempted from the tax and the transactions of the earlier period were not to be exempted and were to be taxed under section 3. That the assesseee paid the licence fee calculated on the net turnover of the whole assessment year is immaterial and does not mean that the licence was valid for the whole assessment year and that all transactions carried out in accordance with the terms and conditions of the licence during the whole assessment year were to be exempted. The option of applying for a licence or not was of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of buying and selling is quite different from the activity which the assessee did. In the other case it was decided by a Bench of this Court that when an agent buys goods on behalf of his principal and supplies them to him, he does not sell them to him. Obviously when a principal employs an agent to buy goods for him and the latter buys and delivers them to him he does not sell them, because the act of selling is done by the person from whom be bought them and the act of buying is done by his principal through him. He acts only as an agent for the purpose of buying goods on behalf of the principal; it is really the principal who buys them. The delivery of the goods by him to the principal cannot possibly amount to a sale and this was the essence of the decision in that case. What the assessee did in this case is quite different from what the agent did in that case. Merely because both are commission agents it cannot be said that the decision in that case that the agent was not a dealer means that the assessee in the instant case also was not a dealer. There are commission agents and commission agents; one may be a dealer even though another is not. In Public Prosecutor v. Nara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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