Substantial compliance in sales tax exemptions protects commission agents when cash-bill issuance is impracticable in trade conditions.

Commission agents claiming exemption under section 8 of the Madras General Sales Tax Act were protected where the accounts enabled principals and turnover to be traced, and the dealers had substantially complied with the licence conditions. The Court treated the cash-bill requirement as directory rather than mandatory, because issuing cash bills was found practically impossible in the rush of trade in perishable goods. Since the department did not dispute the correctness of the accounts or the ascertainment of the principals' turnover, non-issue of cash bills did not defeat the statutory exemption. The principle applied was that the law does not compel impossibilities when substantial compliance is otherwise shown.

---

---

Issues: Whether commission agents were entitled to exemption under section 8 of the Madras General Sales Tax Act notwithstanding non-issue of cash bills, where compliance with that condition was found to be impossible in the nature of the trade.

Analysis: The exemption scheme under section 8 protected commission agents acting bona fide, provided the relevant accounts enabled the principals and turnover to be traced and assessed. The Tribunal found as a fact that these dealers conducted business in perishable goods under conditions making it practically impossible to issue cash bills in the rush hours of trade. The department did not dispute the correctness of the accounts or the ascertainment of the principals' turnover from the pattials, and substantial compliance with the licence conditions was established. Applying the principle that the law does not compel impossibilities, failure to comply with the cash-bill condition did not justify denial of the statutory exemption. The Court also indicated that the condition requiring issue of cash bills was directory rather than mandatory.

Conclusion: The commission agents were entitled to the exemption under section 8, and non-issue of cash bills did not deprive them of the benefit of the provision.

Ratio Decidendi: Where a licence condition under a fiscal exemption is impossible of performance without fault of the assessee, and there is substantial compliance with the remaining requirements, failure to satisfy that condition does not defeat the statutory exemption, especially where the taxable turnover of the disclosed principal can still be ascertained.

---