Del credere agent taxability depends on statutory inclusion and factual situs of sales under sales tax law.

A del credere agent was treated as a dealer under the Tamil Nadu General Sales Tax Act because the statute expressly included such agents and contained a deeming provision covering sales through mercantile agents. The mere agency label did not exclude tax liability. Liability also depended on the factual situs of the transactions: if goods moved directly from Gujarat, the sales could fall in the inter-State stream, but if the supply originated within Tamil Nadu, local taxability could arise. The CST assessments were quashed, while the TNGST assessments were set aside and remitted for fresh factual determination.

---

---

Issues: (i) Whether a del credere agent falls within the definition of dealer and can be fastened with tax liability under the Tamil Nadu General Sales Tax Act, 1959 and the Central Sales Tax Act, 1956. (ii) Whether the impugned assessments could be sustained without first determining, on facts, whether the relevant sales were inter-State transactions from Gujarat or taxable local sales within Tamil Nadu.

Issue (i): Whether a del credere agent falls within the definition of dealer and can be fastened with tax liability under the Tamil Nadu General Sales Tax Act, 1959 and the Central Sales Tax Act, 1956.

Analysis: The statutory definitions expressly included a del credere agent within the expression dealer. The definition of sale under the Tamil Nadu enactment also contained an express deeming provision covering transfers through a del credere agent and similar mercantile agents. The earlier Supreme Court ruling relied on by the petitioner was distinguishable because the Tamil Nadu enactment contained a specific inclusive and deeming scheme not found in the Kerala provision considered there. The mere description of the relationship as agency was therefore not enough to exclude taxability.

Conclusion: The petitioner was not automatically outside the tax net merely because it acted as a del credere agent; the statutory scheme treated such an agent as a dealer for relevant purposes.

Issue (ii): Whether the impugned assessments could be sustained without first determining, on facts, whether the relevant sales were inter-State transactions from Gujarat or taxable local sales within Tamil Nadu.

Analysis: Liability depended on where the goods were situated and from where the sale movement originated. If the goods moved directly from Gujarat, the transaction would fall in the inter-State stream and the petitioner could not be assessed in Tamil Nadu on that basis. If, however, the supply originated within Tamil Nadu and the goods were available in the State at the relevant time, the transaction could attract liability. That determination required factual verification by the assessing authority, and the record before the Court was insufficient for a final factual finding on the Tamil Nadu assessments.

Conclusion: The CST assessments were quashed and the TNGST assessments were set aside and remitted for fresh determination of taxability on facts.

Final Conclusion: The petitioner obtained relief against the Central Sales Tax assessments, while the Tamil Nadu General Sales Tax assessments were not finally upheld and were sent back for reconsideration on the question of taxable situs and factual liability.

Ratio Decidendi: Where the sales-tax statute expressly includes del credere agents within the definition of dealer and contains a deeming provision treating transactions through such agents as sales, taxability depends on the statutory scheme and the factual situs of the transaction, which must be ascertained before fastening liability.

---