Agency in export transactions determines whether turnover is exempt export sale or taxable local sale.

Turnovers were treated as local sales, not exempt export sales, because the local exporting houses were found to contract in their own right rather than as agents of the appellants. The correspondence did not establish any agency relationship, and nothing in the dealings with foreign buyers showed that the exporters were acting on behalf of the appellants. Applying the distinction between a sale to an agent and a sale through an agent, the transactions were regarded as sales by the appellants to the exporting houses, followed by separate sales to foreign buyers. The result was liability to sales tax and failure of the export exemption claim.

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Issues: Whether the disputed turnovers represented exempt sales in the course of export through local agents, or local sales by the appellants to the exporting houses liable to sales tax.

Analysis: The decisive question was whether the local exporting houses acted merely as agents of the appellants or dealt with the goods in their own right. The correspondence did not show any agency on behalf of the appellants, and there was nothing in the dealings with the foreign buyers to indicate that the exporters were acting for someone else. On that footing, the transactions had to be treated as local sales by the appellants to the exporting houses, which in turn made sales to the foreign buyers. The reasoning applied the distinction between a sale to an agent and a sale through an agent, and followed the principle that where the intermediary contracts on his own right there is a deemed local sale to that intermediary.

Conclusion: The turnovers were liable to sales tax and the claim for export exemption failed.

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