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2011 (7) TMI 1066 - KERALA HIGH COURTWhether the transaction between the company and the agents is an agency agreement whereunder company reimburses purchase cost and expenses and the agents are paid commission? Held that:- The goods procured by the agents are only sold to the petitioner against form 25 issued by the petitioner. Though the arrangement is apparently stated as agency, the transactions prove otherwise. The agency arrangement appears to be only a scheme for splitting up of price between purchase cost, transport cost, commission, etc., to avoid tax on part of the turnover. In our view, this is a clear attempt to reduce incidence of tax on the actual turnover. We, therefore, cannot accept the contention of the petitioner that the conditions provided in Explanation 5 to section 2(xxi) are not satisfied. In view of the findings above, we dismiss the S. T. Revision cases.
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