First sale by procurement agent is taxable where title vests in the agent and no valid exemption is shown.

A procurement agent that acquires title in declared foodgrains and effects the first sale after procurement for consideration is liable to sales tax under the Karnataka Sales Tax Act's special charging scheme. The sale is treated as a taxable transaction by the assessee, not a mere transfer on behalf of a non-taxable principal. A claimed exemption cannot be derived from a schedule entry or departmental circular unless supported by a valid exemption under section 8A. On the stated facts, the disputed turnover was taxable and the assessee was required to collect and pay sales tax.

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Issues: Whether the petitioner, acting as a procurement agent for foodgrains, was liable to sales tax on the first sale after procurement, despite claiming that the transactions were only transfers on behalf of the State and were covered by entry 41 of the Fifth Schedule or by a departmental circular.

Analysis: The turnover arose from foodgrains procured by the corporation in its own name and thereafter transferred for consideration. On those facts, the transactions were not mere acts of distribution by an agent of a non-taxable principal, but sales of goods belonging to the assessee. Section 5 of the Karnataka Sales Tax Act, 1957, read with the second proviso to sub-section (4), makes the first sale by a procurement agent after procurement the taxable point. The claimed exemption could not be inferred from the schedule entry or the circular in the absence of an exemption granted under section 8A of the Act.

Conclusion: The petitioner was liable to collect and pay sales tax on the disputed turnover, and the revision petition failed.

Ratio Decidendi: Where a procurement agent acquires title in declared goods and makes the first sale after procurement for consideration, the sale is taxable under the special charging scheme unless a valid exemption under the Act is shown.

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