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2020 (3) TMI 143 - HC - VAT and Sales TaxFailure to pay the disputed tax - TNGST Act, 1959 - CST Act, 1956 - respondent Commercial Tax Officer has held that the petitioner was acting as a Del credere agent for Tvl. Reliance Industries Ltd. and had failed to discharge the tax liability under the respective Acts - HELD THAT:- A Del Credere Agent is someone who usually for extra remuneration undertakes the liability to guarantee the due performance of the contract by the buyer. A Del credere commission charged by him. He assumes responsibility for the solvency and performance of their contract by the vendees and thus indemnifies the Principal against any loss on account of possible default. He gives a security to the seller. The Del credere commission is the premium or price given by the principal to the Del credere agent for the guarantee given by the latter. A Del Credere agent is like any other agent bound to handover the money to the principal, as soon as he receives it or pays in advance and is distinguished from other agents. The fact that the petitioner acted as a ‘Del Credere’ Agent stands established and therefore, the petitioner was a dealer within the meaning of the respective enactments - Whereas in Explanation (1-B) to Section 2(n) of TNGST Act, 1959, transfer of property involved in the purchase, sale, supply or distribution of goods through a factor, broker, commission agent or arhati, del credere agent or an auctioneer or any other mercantile agent, by whatever name called, whether for cash or for deferred payment or other valuable consideration, shall be deemed to be a purchase or sale, as the case may be, by such factor , broker, commission agent or arhati, del credere agent, auctioneer or any other mercantile agent, by whatever name called, for the purposes of this Act. From a cumulative reading of the definition of ‘sale’ in Section 2(n) of the TNGST Act, 1959 only in the case of ‘ascertained goods’ within the state of Tamil Nadu at the time of sale will be liable to tax in the hands of a ‘Del credere’ agent. In this case, it is the contention of the petitioner that the goods were transferred by their principal namely Reliance Industries Ltd directly from the State of Gujarat. This would require verification on facts - The question of treating a transaction as ‘sale’ by the petitioner would arise only if the ‘goods’ were available in the State of Tamil Nadu when the petitioner placed purchase orders for and on behalf of the prospective buyers on the supplier in Tamil Nadu. This is a question of fact which would be required to be ascertained under only by the adjudicating authority. The cases are remitted back to the respondent for proper determination of taxability - petition allowed by way of remand.
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