Commission agent sales turnover taxed as dealer; unauthorised russum collections cannot be recovered unless lawfully leviable.

Collections described as "russum" cannot be recovered by the State unless the amount was lawfully leviable as tax under the Act and Rules; a provision allowing a registered dealer to collect tax is only enabling and does not itself create a liability to remit unauthorised collections. On the facts, the commission agents bought goods in their own names, assumed direct liability to sellers, took delivery, and resold to undisclosed principals, so their activity amounted to sales by a dealer rather than a pure agency. Tax was therefore attracted on the sales turnover, and the absence of a section 8 licence did not exempt them from liability.

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Issues: (i) Whether amounts collected by the commission agents as "russum" could be recovered by the State under the provision governing collections by registered dealers, even if the levy was not otherwise authorised by the Act and the Rules. (ii) Whether the petitioners, though commission agents, were liable to sales tax as dealers on the sales turnover of goods supplied to their principals and whether the absence of a licence under section 8 protected them from such liability.

Issue (i): Whether amounts collected by the commission agents as "russum" could be recovered by the State under the provision governing collections by registered dealers, even if the levy was not otherwise authorised by the Act and the Rules.

Analysis: The provision permitting a registered dealer to collect tax is only enabling in character and does not authorise recovery of amounts unless the levy is lawfully attracted under the Act. A collection made under another label does not by itself create a statutory duty to pay it over to the State. The obligation to account arises only where the amount collected is one lawfully collectible as tax under the Act and the Rules.

Conclusion: The State was not entitled to recover the russum collections merely because they had been collected from principals.

Issue (ii): Whether the petitioners, though commission agents, were liable to sales tax as dealers on the sales turnover of goods supplied to their principals and whether the absence of a licence under section 8 protected them from such liability.

Analysis: On the facts, the petitioners purchased the goods in their own name, assumed direct liability to the sellers, took delivery, despatched the goods to their constituents, and realised the price through commercial channels. The arrangement was therefore not a pure agency but a business in which the petitioners sold goods to undisclosed principals, bringing them within the definition of dealer. Under the charging provisions, tax was attracted only on the sales turnover of the goods, not on purchase turnover. The absence of a licence under section 8 did not confer immunity from tax on the sales turnover.

Conclusion: The petitioners were liable to sales tax as dealers on their sales turnover and were not protected by section 8.

Final Conclusion: The statutory scheme did not justify recovery of unauthorised collections as such, but the petitioners' business fell within the taxable category as sales by a dealer, so the revision failed.

Ratio Decidendi: A registered dealer can be compelled to pay over collections only when the amount was lawfully leviable as tax under the Act, and a commission agent who buys and resells goods in his own name to undisclosed principals is taxable as a dealer on the sales turnover of those transactions.

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