Agency liability under sales tax law is derivative only where the principal is taxable on the same transactions.

Under the Mysore Sales Tax Act, 1957, a commission agent acting for resident principals is exposed to liability only to the extent that the principal is itself liable on the same transactions. Section 11 creates a derivative agency liability, but it does not enlarge the charging scheme in section 5 or displace the turnover threshold that exempts dealers below the prescribed limit. Section 6(2) is an ancillary levy treated as tax, yet it cannot extend liability beyond the class of dealers otherwise taxable under section 5. Where the principals' turnover remained below the statutory threshold, the agent could not be assessed to licence fee or tax on those transactions, and the assessment was unsustainable.

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Issues: Whether a commission agent, acting for resident principals whose total turnover was below the statutory threshold, could be assessed to licence fee under the Mysore Sales Tax Act, 1957 on the same transactions merely because the sales were routed through him.

Analysis: Section 11 of the Mysore Sales Tax Act, 1957 obliges a commission agent to obtain a licence and, in the case of an agent acting for a resident principal, contemplates assessment of tax in respect of the very transactions of the principal. That liability, however, is derivative and depends upon the principal being liable in respect of those transactions. The charging scheme under section 5 of the Mysore Sales Tax Act, 1957, particularly sub-section (5), excludes dealers whose total turnover is below the prescribed limit from liability. Section 6 of the Mysore Sales Tax Act, 1957 is an ancillary provision and operates as an exception to section 5; the licence fee under section 6(2) is to be treated as tax but cannot extend liability beyond the class of dealers otherwise taxable under section 5. Since the principals themselves were not liable to tax or licence fee because their turnover did not exceed the threshold, the agent could not be fastened with a corresponding liability. The fact that the petitioner was a dealer for other purposes was held to be immaterial while he acted within section 11 as an agent.

Conclusion: The petitioner was not liable to pay the licence fee or tax under section 6(2) in respect of the impugned transactions, and the assessment order was unsustainable.

Final Conclusion: The writ petition succeeded and the assessment made against the commission agent was set aside for want of authority of law.

Ratio Decidendi: An agent assessed under the agency provision can be taxed only to the extent the principal is liable on the same transactions, and an ancillary levy cannot override the statutory exemption or turnover threshold attached to the charging provision.

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