Commission agent liability under sales tax law confirmed where the agent had authority to sell and remit proceeds to the principal.

An assessee authorised under an agreement to hold stock for a corporation, sell specified quantities at prescribed prices, collect proceeds, retain only a service charge, and remit the balance was treated as a commission agent with authority to sell. On that basis, the agent fell within the inclusive definition of "dealer" under section 2(g) of the Tamil Nadu General Sales Tax Act, 1959, and was liable to sales tax on the turnover of wheat bran and other wheat products. A private arrangement that the corporation would bear the tax did not affect the statutory liability to the Revenue, and the risk of double recovery did not displace liability absent proof of prior collection on the same turnover.

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Issues: Whether the assessee, acting under an agreement with the Tamil Nadu Civil Supplies Corporation, was a commission agent and therefore a dealer liable to sales tax under section 2(g) of the Tamil Nadu General Sales Tax Act, 1959 on the turnover of wheat bran and other wheat products.

Analysis: The agreement showed that the assessee was authorised to hold the stocks on behalf of the Corporation, sell specified quantities at prescribed prices, collect the sale proceeds, retain only a service charge, and remit the balance to the Corporation. These features established that the assessee had authority to sell the goods and acted as a commission agent. The inclusive definition of "dealer" in section 2(g) covered such an agent. The fact that the Corporation may have undertaken to bear the tax did not affect the statutory liability of the assessee vis-a -vis the Revenue. The concern that tax should not be recovered twice was noted, but in the absence of proof that tax had already been recovered from the principal on the same turnover, the assessee's liability remained unaffected.

Conclusion: The assessee was a commission agent and a dealer within section 2(g), and the disputed turnover was liable to sales tax in its hands.

Final Conclusion: The appeal failed and the assessment of the disputed turnover as taxable was sustained.

Ratio Decidendi: An agent who is authorised to sell goods on behalf of a principal and whose activities fall within the inclusive definition of "dealer" under the sales tax statute is liable to tax on the turnover, notwithstanding any private arrangement that the principal will bear the tax.

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