Commission agent sales tax exemption requires proof of each principal's agriculturist status and separate turnover examination.

A commission agent claiming sales tax exemption on commission sales must still prove that the relevant principals were agriculturists and producers, although supporting material may be drawn from market committee records and other evidence rather than only pahani extracts. Taxability must be tested principal-wise: each principal's turnover has to be examined separately, and transactions of one principal cannot be taxed merely because the agent's aggregate turnover exceeds the limit. The assessee must also be given a fair opportunity to lead evidence on exemption and turnover. The assessment and appellate orders were set aside and the matter remitted for fresh adjudication.

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Issues: (i) whether a commission agent dealing in agricultural produce could claim exemption from sales tax on commission sales on the footing that the principals were agriculturists and producers; (ii) whether the turnover of each principal had to be separately considered for determining taxability and whether the assessee had been denied a fair opportunity to produce evidence in support of exemption.

Issue (i): Whether a commission agent dealing in agricultural produce could claim exemption from sales tax on commission sales on the footing that the principals were agriculturists and producers.

Analysis: The exemption claim turned on the statutory scheme governing sales tax and the marketing regulation applicable to commission agents. The licensing and regulatory framework under the agricultural produce marketing law supported the inference that a commission agent functioned for producers, but that inference did not dispense with the need to prove that the particular principals were agriculturists and producers. The burden of proving non-liability to tax remained on the dealer, yet the material could be drawn from records maintained by the market committee and other available evidence, not only from pahani extracts.

Conclusion: The claim of exemption was not rejected on merits, and the assessee was entitled to an opportunity to prove that the principals were agriculturists and producers.

Issue (ii): Whether the turnover of each principal had to be separately considered for determining taxability and whether the assessee had been denied a fair opportunity to produce evidence in support of exemption.

Analysis: The tax threshold had to be applied with reference to each principal whose transactions were conducted through the commission agent. If the turnover of an individual principal did not exceed the statutory limit and the principal had no other taxable turnover, that turnover could not be assessed merely because the agent's aggregate commission sales were higher. On the facts, the assessee had not been afforded adequate opportunity by the assessing authority to substantiate both the agriculturist status of the principals and the turnover position of each principal.

Conclusion: The turnover of each principal had to be examined separately, and the matter required fresh consideration after giving the assessee a proper opportunity to lead evidence.

Final Conclusion: The assessment and appellate orders relating to the commission agency turnover were set aside and the matter was remitted for fresh adjudication on the exemption claim after allowing evidence.

Ratio Decidendi: In a tax exemption claim by a commission agent, the dealer carries the burden of proof, but taxability of commission sales must be tested with reference to each principal and the assessee must be given a fair opportunity to establish the factual basis for exemption.

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