Agent liability under sales tax law: commission agent in hides and skins was not covered by the exemption proviso.

An agent carrying on commission agency business in hides and skins was not exempt from sales tax under the proviso to section 9 of the Hyderabad General Sales Tax Act, 1950. The proviso made the agent liable to assessment where the business was carried on for a principal resident in Hyderabad State; the exemption operated for the principal, not the agent. The agent was required to pay the tax, with a right to recover it from the principal, while the principal was protected from double taxation on the same transaction. The levy on the petitioner was therefore valid.

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Issues: Whether an agent carrying on commission agency business in hides and skins was exempt from sales tax under the proviso to section 9 of the Hyderabad General Sales Tax Act, 1950.

Analysis: The proviso to section 9 made the agent liable to assessment where he carried on the business on behalf of a principal who was a resident of the Hyderabad State. The exemption operated in favour of the principal, not the agent. The agent was required to pay the tax, though he could recover it from the principal, and the principal was protected against being taxed again in respect of the same transaction. The Court therefore held that the petitioner did not fall within the claimed exemption.

Conclusion: The agent was not entitled to exemption from sales tax under the proviso to section 9, and the levy was valid.

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