TMI Blog1985 (12) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... to various dealers on wholesale basis and the sales tax was collected by the commission agent. 2.. For the assessment periods 1st April, 1976, to 31st March, 1977, and 1st April, 1977, to 31st March, 1978, it was seen on verification by the department that tax for the two periods had not been paid by the Gekayel Enterprises. Therefore, a proposition notice in form No. 31-A was issued on 8th March, 1979, for the year ending 31st March, 1977, and on 17th December, 1981, for the year ending 31st March, 1978, produced as annexure B in each of the writ petitions. After hearing the representative of the petitioner-company the assessments for both the years were completed by the Assistant Commissioner of Commercial Taxes (Assessment) I, City Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under section 2(k) of the Act as follows: "2. (k) 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration" and includes: "(iii) a commission agent, a broker or 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 on behalf of any principal." Under section 11 of the Act, an agent is made liable to pay tax in respect of sale or purchase made on behalf of any principal. Proviso to section 11(1) of the Act reads thus: "Provided that the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while the Bill was introduced in the State Legislature. "Under the existing provisions of the Bill, agent is taxed as qua agent and not as a dealer. The agent's liability is, therefore, coextensive with that of his principal and if the principal cannot be taxed in respect of a transaction his agent also cannot be taxed. It is proposed to modify the applicability of law of agency to the assessments under the Bill by providing that the turnover effected by the agents, who is also a dealer under the Bill, shall be deemed to be his own turnover for the purposes of levying tax." This is only clarificatory and does not introduce anything new as to the liability of the principal and the agent which is coextensive under the Act. The departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t section 11 was only an enabling provision to make the agent liable to pay the tax and further that the principal who is also a "dealer" as defined in section 2(1)(k) of the Act would still be assessable under the Act. 11.. This view was further reiterated in a later decision of this Court in G. Pampapatheppa Sons v. Commissioner of Commercial Taxes (Sales Tax Appeals Nos. 21 and 22 of 1976 disposed of on 11th January, 1979) (printed at page 373 infra). The Deputy Commissioner in the appeals by the assessee in that case, had taken the view that only the commission agent should be assessed and not the principal and thus set aside the orders of assessment. The Commissioner reversed the order of the Deputy Commissioner and restored the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Government Pleader, that there was no assessment made against Gekayel Enterprises who are the agents for the two periods in question. Therefore, assessments made against the principals for the two periods are justified in law and there is no reason to interfere with the same. Writ petitions are accordingly dismissed. Writ Petitions dismissed. Appendix [The judgment of the Division Bench of the Karnataka High Court consisting of E.S. VENKATARAMIAH and RAMA JOIS, JJ., in G. Pampapatheppa Sons v. Commissioner of Commercial Taxes in Karnataka, Bangalore (Sales Tax Appeals Nos. 21 and 22 of 1976 decided on 11th January, 1979) is printed below: ] PAMPAPATHEPPA SONS V. COMMISSIONER OF COMMERCIAL TAXES The judgment of the Court was de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an assessment order passed against them would not be illegal. There is no bar in law for making an order of assessment against the principals, in such a case, unless there is already an order of assessment against the commission agents in respect of the same turnover. This view is in conformity with the view of the Division Bench of this Court in State of Mysore v. F.D. Malladad Bros. [1969] 23 STC 230. 3.. Sri B.V. Katageri, learned counsel for the appellant, however, argued that another Division Bench of this Court had taken a contrary view in Kabaddar, Hubli v. State of Karnataka (S.T.R.P. No. 92 of 1973 decided on 2nd January, 1974). We have gone through that order. In that order there was no order of assessment passed against a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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