Commission agent turnover threshold governs additional tax demand; pre-assessment demand was unsustainable and quashed.

Additional tax under the Karnataka Sales Tax Act could not be demanded from a commission agent before assessment where the statutory turnover threshold had not been established. The court noted that a commission agent's liability under section 11 is tied to transactions carried on on behalf of the principal, so the relevant turnover is that of the principal in a representative capacity. As the turnover for the period was only about Rs. 6.6 lakhs, below the Rs. 10 lakhs threshold, additional tax under section 6-B could not arise before the accounting year closed and assessment was completed. The demand was therefore unsustainable and was quashed.

---

---

Issues: Whether a notice of demand for additional tax under the Karnataka Sales Tax Act, 1957 was sustainable against a commission agent before completion of assessment, when the turnover for the relevant period had not crossed the statutory threshold.

Analysis: The liability of a commission agent under section 11 is linked to transactions carried on on behalf of the principal, and the turnover relevant for tax purposes is that of the principal in the agent's representative capacity. Even on the petitioner's own showing, the turnover for the period in question was only about Rs. 6.6 lakhs, well below the threshold of Rs. 10 lakhs. Additional tax under section 6-B could not arise unless the statutory threshold was reached, and that could not be assumed before the close of the accounting year and assessment. The demand was therefore unsupported by the Act and was issued without an assessment basis.

Conclusion: The demand for additional tax was unsustainable and was quashed; the petitioner succeeded.

Ratio Decidendi: A demand for additional tax cannot be enforced before assessment where the statutory turnover threshold has not been established, and in the case of a commission agent the relevant turnover is that of the principal in the representative capacity recognized by the statute.

---