Double taxation on the same sale rejected where an authorised commission agent's turnover was already taxed.

Sales tax under Section 3 of the Madras General Sales Tax Act, 1939 applies to a dealer's turnover, and an authorised commission agent may be treated as the dealer for the sale he makes. Where the department has already taxed the same sale in the hands of the unlicensed agent, the Act does not permit that single transaction to be split and taxed again as the principal's turnover. No separate sale by the principal to the agent arose, and no second taxable turnover existed. Accordingly, double taxation on the same turnover was not justified, and the Tribunal's view was upheld.

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Issues: Whether sales tax could be levied again on the principal in respect of the same turnover already taxed in the hands of an unlicensed commission agent.

Analysis: Section 3 of the Madras General Sales Tax Act, 1939, charges tax on the turnover of a dealer. A commission agent, when authorised to sell goods and pass property in them, may be treated as a dealer for the purpose of the sale made by him. Once the department has treated that sale as the agent's turnover and levied tax accordingly, the same single sale cannot be split into two taxable sales by treating it again as the principal's turnover. The transaction did not create a separate sale by the principal to the agent, nor did it produce a second turnover attracting the charging provision. The scheme of the Act does not permit the same sale to be taxed twice over merely because the goods belonged to the principal.

Conclusion: The levy of sales tax on the principal in respect of the same turnover was not justified. The view of the Tribunal was upheld and the petitions were dismissed.

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