Agent turnover cannot be clubbed for tax when each principal stays below the statutory threshold for general goods.

Amendments to the definition of "dealer" and section 11 did not permit tax to be levied on an agent selling general goods for several principals by clubbing all principals' turnover. The Court noted that an agent's liability is ordinarily coextensive with the principal's liability and that section 11 is a machinery provision. Because the validating changes were directed specially to jaggery and no similar provision was made for other general goods, the principal remained liable only if its turnover exceeded the statutory limit under section 5(1). An agent could not be assessed merely because the combined turnover on behalf of multiple principals crossed the threshold when each principal individually remained below it.

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Issues: Whether, after the amendment substituting the words "principal or principals" in the definition of "dealer" and the related changes to section 11, an agent selling general goods on behalf of several principals can be assessed to tax by clubbing the turnover of all principals even when the turnover of each principal is below the prescribed limit.

Analysis: The definition of "dealer" was amended to include an agent acting on behalf of "principal or principals", and section 11 was recast to make the agent liable irrespective of the principal's liability in certain cases. The Court noted the earlier line of authority that an agent's liability is ordinarily coextensive with the liability of the principal and that section 11 is a machinery provision. It further noticed that the later legislative changes validating the law were directed specially to jaggery, while no corresponding provision was made for other general goods. For general goods, the principal would not be liable unless his turnover exceeded the statutory limit under section 5(1), and the agent could not be made liable merely because he acted for several principals. The turnover of an agent representing several principals could not be aggregated to fasten liability where each principal individually remained below the taxable threshold.

Conclusion: The turnover of the dealer, acting as agent for several principals in respect of general goods, could not be brought to tax when the turnover of each principal was below the prescribed limit. The revision was rightly rejected and the State's challenge failed.

Ratio Decidendi: In respect of general goods, an agent cannot be subjected to sales tax merely because his aggregate turnover on behalf of multiple principals exceeds the threshold if each principal's turnover remains below the statutory limit and the principal is not otherwise liable.

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