Commission-agent sales count toward gross turnover when the statute treats them as taxable but exempts them only in another permissible hand.

Sales made through commission agents were includible in the assessee's gross turnover under the U.P. Sales Tax Act for determining tax liability and threshold applicability. The charging scheme taxed turnover above the prescribed limit, the statutory definition of dealer treated commission-agent sales as part of the taxable framework, and the turnover definition covered sales effected directly or through another person. The exemption for the principal operated only where tax had already been paid in another permissible hand. As a result, sales otherwise taxable in law could still be aggregated in gross turnover even if they were not taxed in the assessee's hands.

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Issues: Whether sales made through commission agents could be included in the assessee's gross turnover for determining liability to tax under the U.P. Sales Tax Act.

Analysis: The charging provision made tax payable on turnover exceeding the prescribed limit, while the definition of dealer treated a commission agent as a dealer where goods were sold through him. The definition of turnover covered sales effected directly or through another, and the explanation to section 3 exempted the principal only where the commission agent had already paid tax on the same turnover. Rule 8 required liability to tax to be determined on the basis of gross turnover, which included sales effected through a commission agent. Since the disputed sales were taxable in law and were excluded from levy only by reason of the statutory exemption, they could still be aggregated for computing gross turnover.

Conclusion: The sales made through commission agents were includible in the assessee's gross turnover even though they were not taxable in the assessee's hands.

Final Conclusion: The reference was answered in favour of the department, and the legal position affirmed that commission-agent sales form part of gross turnover for threshold and liability purposes when the statute so provides.

Ratio Decidendi: Sales which are otherwise taxable but are exempted from levy only because tax has been paid in another permissible hand may still be included in gross turnover for determining liability under the Act.

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