Statutory fiction and first-sale exemption require separate proof; factual findings on dealer status and post-import sale were needed.

A statutory fiction deeming a resident agent of a non-resident to be a dealer for assessment purposes does not automatically extend to exemption claims under a different provision. To claim the first-sale exemption, the assessee had to prove that the person who negotiated the sale answered the relevant definition of dealer and that the sale satisfied the factual requirements of being the first sale of imported goods within the State after import. The record lacked findings on the agent's status, the place of sale, and when property passed, so the matter required fresh factual determination on remand.

---

---

Issues: (i) Whether an agent of a non-resident supplier could be treated as a dealer within the meaning of the Act for the purpose of claiming exemption under the proviso to section 3(2); (ii) whether the assessee had established that the sale to him was the first sale of imported goods effected within the State of Madras after import.

Issue (i): Whether an agent of a non-resident supplier could be treated as a dealer within the meaning of the Act for the purpose of claiming exemption under the proviso to section 3(2)

Analysis: The liability fiction in section 14-A(i) deems the resident agent of a non-resident to be the dealer for assessing tax on the non-resident's business. That fiction, however, is confined to the purpose for which it is created and cannot automatically be carried into section 3(2). For exemption, it had to be shown that the person who negotiated the sale was an agent of the kind covered by the definition of dealer in section 2(b). No finding had been recorded on that question.

Conclusion: The question was not finally determined against the assessee and required fresh findings.

Issue (ii): Whether the assessee had established that the sale to him was the first sale of imported goods effected within the State of Madras after import

Analysis: To obtain exemption, the assessee had to prove that the goods were imported into the State, that the sale to him was effected in the State, that it was made by a dealer residing in the State, and that the sale took place after import. The record did not contain clear findings on the place of sale, the passing of property, or whether the sale was after import. Those factual matters had not been investigated by the taxing authorities or the High Court.

Conclusion: The issue could not be decided on the existing record and had to be examined afresh on remand.

Final Conclusion: The matter was sent back for determination of the factual questions necessary to decide whether the assessee was entitled to exemption from tax on the disputed turnover.

Ratio Decidendi: A statutory fiction deeming a resident agent of a non-resident to be a dealer for assessment purposes does not, without more, establish entitlement to exemption as a first sale under a different provision; the assessee must prove the agent's status under the relevant definition and the factual requirements of sale within the State after import.

---