9911796707
TMI Blog1989 (8) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 but was gradually stepped up to Rs. 20,000 in 1971, Rs. 25,000 in 1976, Rs. 35,000 in 1980, Rs. 50,000 in 1981, Rs. 75,000 in 1982 and Rs. 1 lakh in 1984. The expressions "dealer", "taxable turnover", "total turnover" and "turnover" are defined in section 2 of the Act. The relevant portions of these definitions read as follows: Section 2(viii): " 'Dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods, or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes- (b) ** ** ** (c) a commission agent, a broker or a del credere agent or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods on behalf of any principal." Section 2(xxv): " 'taxable turnover' means the turnover on which a dealer shall be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods sold by him, the surcharge has to be borne by the dealer himself, for sub-section (2) of section 3 of the Surcharge Act prohibits the dealer from collecting the surcharge payable by him under sub-section (1) on pain of prosecution under sub- section (3). The second is that while a dealer might be liable to sales tax at different rates on the turnover of the different goods dealt in by him, he has to pay a surcharge calculated on the amount of the sales tax payable by him in respect of his total dealings throughout the year. The assessee is a society registered under the Societies Registration Act. Its members are cardamom growers in the State of Kerala. Under the Cardamom Act, 1965 (42 of 1965), read with the Cardamom (Licensing and Marketing) Rules, 1977, no person is entitled to carry on business as auctioneer, dealer or exporter of cardamom except under and in accordance with the terms and conditions of a licence issued under the Act and Rules. One of the conditions of the grant of licence to a person as an auctioneer is that he "shall not charge more than one per cent of the sale price as commission for the services rendered by him". It is common ground that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73-74 to 1976-77. The High Court, on revision by the department, has set aside the orders of the Tribunal and restored the orders of the Deputy Commissioner. Hence these appeals. We are unable to see any flaw in the High Court's reasoning. The present assessee is clearly a dealer within the meaning of the statute, particularly in view of the inclusive part of the definition contained in clause (c). This is also the finding of the Tribunal and is also admitted by the assessee. Likewise, the provisions of section 5 of the Sales Tax Act and section 3 of the Surcharge Act, read with the definitions of the words "turnover", "taxable turnover" and "total turnover", leave no doubt that the assessee's taxable turnover has to be determined by taking the aggregate price of all the goods sold by it. There is no statutory warrant for breaking up the sales turnover of the assessee by reference to the turnover of the principals on whose behalf it deals. Also, a logical corollary of the assessee's argument would be that, even in respect of tax, the society can be assessed to sales tax only on the aggregate turnover relating to those of its principals who are liable to tax under section 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... face of the statutory provisions. The assessee's contention, upheld by the Tribunal in its earlier order, is this: "........ an agent has as many dealers as he has principals........an agent can be assessed....... only on the aggregate of the turnover relating to principals who are liable to tax under section 5 and surcharge can likewise be levied only in respect of the turnover of the principals where total turnover is not less than Rs. 30,000." This will also mean that, after the amendment of section 3 of the Surcharge Act in 1976 that the agent will be liable to a surcharge at 8 per cent in respect of the turnover on behalf of principals whose total turnover exceeds Rs. 10 lakhs, at 5 per cent in respect of the turnover on behalf of principals having turnovers of between Rs. 1 lakh and Rs. 10 lakhs and no surcharge in respect of the turnover on behalf of principals with turnovers of less than Rs. 1 lakh. This may be equitable but it clearly amounts to running a coach and pair through the statutory provisions. As already pointed out, these provisions clearly treat a commission agent as a dealer and make him liable to sales tax as well as surcharge in respect of his entire turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commission agent but on the principal and does not help the assessee. So far as sales tax is concerned, this rule provides complete protection against double taxation. The rate of tax on any type of goods being uniform irrespective of the turnover, the turnover in regard to that item will get assessed only at one place; either in the hands of the principal or in the hands of the agent but not both. The treatment of the commission agent as a dealer no doubt means that an agent will be taxed where his turnover exceeds the relevant limits even though some or all the principals who sold through him may have turnovers below those limits. But he is not really affected as he can collect the sales tax from the purchasers and thus reimburse himself. The difficulty that has arisen in regard to the surcharge stems principally from the requirement that the society has to pay it out of its funds and cannot reimburse itself either from its vendees or its principals. This difficulty has been further accentuated by the fact that, in regard to cardamom, its earnings are limited to a small commission which cannot be varied by it at its desire. These considerations cannot however justify a dif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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