Trade usage and principal knowledge saved commission-agent collections from breaching the sales tax licence exemption.

Collection of dharmam and dhallal by a commission agent, with the disclosed principals' knowledge and in conformity with established trade usage at Tellicherry, did not violate the licence conditions under Section 8 of the General Sales Tax Act. The accepted evidence showed that such collections were commonly made from buyers, often in the principals' presence, and the fact that the amounts were not part of the principals' disclosed proceeds did not by itself create a breach. The collection therefore remained within the exemption contemplated by Section 8, and the assessee was entitled to continue claiming that benefit.

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Issues: Whether the collection of dharmam and dhallal by a commission agent, with the knowledge of the disclosed principals and in accordance with the trade usage at Tellicherry, violated the terms of the licence under Section 8 of the General Sales Tax Act so as to deny the exemption.

Analysis: The evidence of trade usage was accepted and it was found that commission agents in that commonly collected dharmam and dhallal from buyers, often in the presence of the principals. On the facts, the collections were made with the principals' knowledge, and there was no violation of the licence conditions merely because the amounts did not form part of the principals' disclosed proceeds. The collection therefore did not take the case outside the exemption contemplated by Section 8.

Conclusion: The collection of dharmam and dhallal did not contravene the licence and the assessee remained entitled to the benefit of Section 8 of the General Sales Tax Act.

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