Agent liability under sales tax law is valid in a representative capacity, but primary liability without rational basis violates equality.

An amendment to section 11 of the Andhra Pradesh General Sales Tax Act could validly treat an agent as liable in a representative capacity for completed sales effected on behalf of the principal under entry 54 of List II, because the charging and dealer-definitional provisions supported that construction. It could not, however, impose primary liability on the agent independently of the principal's liability or restrict reimbursement in a way that created unequal treatment between agents and principals similarly situated in the same transaction. The amendment was therefore valid only to the extent it preserved co-extensive liability, and invalid under Article 14 to the extent it fastened discriminatory primary liability on the agent.

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Issues: Whether the amended section 11 of the Andhra Pradesh General Sales Tax Act, 1957, insofar as it made an agent liable for tax independently of the principal's liability and curtailed the agent's right of reimbursement, was within legislative competence and valid under Article 14 of the Constitution of India.

Analysis: The amendment was intended to override the earlier judicial construction that the agent's liability was only co-extensive with that of the principal. The charging provisions and the definition of dealer showed that the agent functioned in a representative capacity and could be treated as a dealer only because he was capable of effecting a sale on behalf of the principal. The Legislature was competent under entry 54 of List II to tax completed sales effected through an agent, and the machinery provision could be read with the charging provision for that purpose. However, the amended section went further and authorized aggregation of the turnover of several principals so as to fasten primary liability on the agent even where the principals themselves were not liable, while also limiting reimbursement to cases where the principal was liable. That treatment placed agents and principals, who were similarly situated in respect of the same transaction, on unequal footing without a rational basis.

Conclusion: The amendment was valid only to the extent that it preserved the agent's co-extensive, representative liability with the principal, but the part that made the agent primarily liable independently of the principal's liability was discriminatory and invalid under Article 14.

Ratio Decidendi: A taxing provision may make an agent liable in his representative capacity for completed sales, but it cannot, without a rational basis, impose primary liability on the agent independently of the principal and thereby discriminate between persons similarly situated.

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