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TMI Blog1966 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered dealer under the Madras General Sales Tax Act, 1939, and carries on the business of buying and selling cloth in the town of Madras. For the assessment year 1956-57 the Deputy Commercial Tax Officer assessed, for purposes of sales tax, the turn- over of the assessee from sale of cloth at Rs. 11,33,355-12-6. This turnover included a sum of Rs. 7,88,352-0-9 which represented turnover in respect of sale of goods purchased by the assessee from dealers not residing within the State of Madras. The assessee claimed that when he sold the goods, he was not the first dealer, and he was on that account exempted from liability to pay sales tax on turnover in respect of goods purchased from the non-resident dealers. The Deputy Commercial Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the tax to which he is liable under sub-section (1) on his total turnover for the year: Provided that, in the case of goods imported into the State of Madras either from outside the territory of India or from any other State in India, the tax shall be levied on the first sale effected in the State of Madras by a dealer who is residing in the State of Madras and who is not exempt from taxation under the next succeeding sub- section, after the import of the said goods into the State of Madras. * * * *" Section 14-A provided: "In the case of any person carrying on the business of buying or selling goods in the State but residing outside it (hereinafter in this section referred to as a 'non-resident'), the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agents or branches of the non-resident sellers. In many cases, the railway receipt is sent to the non-resident's bank and payment would be made at or subsequent to the time when the railway receipt is handed over to the appellant-firm and never before. 6.. Under these circumstances it is submitted that property in the goods passes only in Madras State when delivery is taken by the appellant-firm, that the non-resident seller would be the first seller after import in the State of Madras and since the agent residing in the State of Madras concerned with the business of the non-resident dealer will be deemed to be the 'dealer' with respect to those sales, the provisions of section 3(2) will be attracted and it will be the non- residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be read into the first proviso to section 3(2) of the Act to enable" the assessee "to contend that the sale in his favour was the first sale from another dealer in the State". The High Court however assumed that the sale by the non-resident seller took place within the State of Madras and also assumed that the goods had been sold to the assessee after they were imported into the State of Madras. There is no dispute that the goods in respect of which exemption was claimed were imported goods. But to qualify himself for exemption from liability the assessee had to prove that the goods were sold to him in the State of Madras, that they were sold by a dealer who was residing in the State of Madras, and that the sale to him was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransactions. They have also not determined whether the property in the goods passed within the State of Madras so as to constitute a sale effected in the State of Madras, nor has it been found whether the goods were sold after they had been imported within the State. It may be observed that a resident agent of a non-resident carrying on the business of buying and selling goods within the State of Madras may, for the purposes of the Act, be deemed by virtue of section 14-A(i) to be "the dealer", and liable to pay tax. But the fiction created by section 14-A(i) making an agent of a non-resident a dealer, for imposing upon him the liability of a dealer, does not make every agent a dealer for all the purposes of the Act within the meaning of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through their agents. We are of the view, having regard to the circumstances, that the case should be remanded to the High Court to determine the questions whether the agent of the non-resident supplier was the agent covered by the explanation to the definition of the word "dealer" in section 2(b), whether the property in the goods purchased by the assessee passed within the State of Madras, whether the sale was effected by a dealer resident within the State of Madras, and whether such sale took place after the goods were imported within the State of Madras. The High Court after determining those questions will proceed to dispose of the claim made by the assessee according to law. The High Court may, if it is necessary, call for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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