Turnover exemption for commission agents applies to exempt goods of the non-resident principal, but outside-State delivery needs proof.

A commission agent assessed for a non-resident principal may still claim turnover exemption for agricultural produce where the exemption attaches to the principal's goods, because the agent functions only as the statutory machinery for assessment and collection. The agricultural-produce exemption was therefore applied in computing turnover for rubber sales and for tea up to 1 January 1948. By contrast, exemption for tea intended for delivery outside the State depended on proof of actual delivery outside the State, and the existing record was insufficient to determine the contractual mode and place of delivery. That issue required fresh evidence and reconsideration on remand.

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Issues: (i) Whether a commission agent assessed as dealer in respect of a non-resident principal could claim exemption from turnover under section 2(i) for agricultural produce grown by the principal. (ii) Whether exemption under section 5(v) of the Madras General Sales Tax Act, 1939, for tea intended for delivery outside the State could be granted without evidence of actual delivery outside the State.

Issue (i): Whether a commission agent assessed as dealer in respect of a non-resident principal could claim exemption from turnover under section 2(i) for agricultural produce grown by the principal.

Analysis: A commission agent is treated as a dealer for assessment purposes, but under section 14-A the real tax liability is that of the non-resident principal and the agent is only the statutory machinery for levy and collection. The turnover of the agent represents sales effected on the principal's account, and exemptions attached to the goods in the hands of the principal cannot be ignored merely because the assessment is made through the agent. In the absence of any provision authorising taxation of exempt goods and leaving refund as the only remedy, the exemption under section 2(i) must be given effect to at the stage of computation of turnover.

Conclusion: The appellant was entitled to exemption under section 2(i) in respect of sales of rubber during the relevant period and of tea up to 1 January 1948.

Issue (ii): Whether exemption under section 5(v) of the Madras General Sales Tax Act, 1939, for tea intended for delivery outside the State could be granted without evidence of actual delivery outside the State.

Analysis: The exemption under section 5(v) depended not only on the intended destination of the goods but also on proof that delivery was actually made outside the State. The record did not contain the contracts, nor evidence sufficient to determine the nature of the delivery, the place of delivery, or whether any transfer of documents operated as actual delivery in the relevant transactions. Since actual delivery may differ from passing of property and may require proof of the contractual mode of performance, the claim could not be finally adjudicated on the existing materials.

Conclusion: The question of exemption under section 5(v) was left open and the matter was remitted for fresh evidence and reconsideration.

Final Conclusion: The appellant succeeded on the agricultural-produce exemption, but the claim to exemption for tea sold for delivery outside the State required further factual inquiry, and the suits were sent back for fresh disposal.

Ratio Decidendi: Where a non-resident principal is assessed through a resident commission agent, statutory exemptions attaching to the principal's goods must be considered in computing the agent's turnover, but exemption based on actual delivery requires independent proof of the manner and place of delivery.

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