Agency in import transactions defeats sales tax where title stays with the licence-holder and no principal-to-principal sale arises.

Import documentation and licence conditions can confine the dealer to an agency role where title remains with the licence-holder at customs clearance and thereafter, so no principal-to-principal sale arises and the dealer is not liable to sales tax. In canalised-import transactions through the State Trading Corporation, the dealer merely represented the licence-holders for lifting the newsprint, never became owner, and the goods had already suffered tax in the hands of the importing entity. On that footing, the transactions were treated as agency arrangements rather than taxable sales by the dealer.

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Issues: Whether the dealer, in importing newsprint under actual user licences or procuring canalised imports through the State Trading Corporation, acted only as an agent of the licensees and was therefore not liable to sales tax on the transactions.

Analysis: The import licences and letters of authority required the dealer to act purely as an agent, with the imported goods remaining the property of the licence-holders both at the time of customs clearance and thereafter. The dealer had no independent right to dispose of the goods, there was no transfer of property to the dealer, and no principal-to-principal sale could arise between the dealer and the licensees. In the canalised-import transactions, the State Trading Corporation imported the goods and had already suffered sales tax on the supplies made to the licensees. The dealer only represented the licensees for lifting the goods and never became the owner of the newsprint.

Conclusion: The dealer was only an agent in both categories of transactions and was not exigible to sales tax.

Ratio Decidendi: Where import documentation and the governing licence conditions make the importer an agent and reserve title in the goods to the licence-holder, no taxable sale arises in the hands of the agent.

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