Deemed dealer liability upheld where a resident agent conducted State sales for non-resident principals under a statutory fiction.

A resident agent was treated as a deemed dealer under section 14-A because the non-resident principals were found to be carrying on sales in the State and the agent was the channel through which those sales were conducted. The Court held that the statutory fiction applied where the agent received railway receipts, delivered goods to buyers, and in some cases collected and remitted sale proceeds. On those facts, the agent fell within the scope of the deeming provision and sales tax liability attached to the relevant transactions. The assessment was therefore upheld.

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Issues: Whether the appellant, as agent of non-resident principals, was liable to be treated as a dealer and assessed to sales tax under section 14-A of the Madras General Sales Tax Act, 1939 in respect of the third category of transactions.

Analysis: Section 14-A fastened liability on the agent of a non-resident carrying on the business of buying or selling goods in the State, by deeming the agent to be the dealer for the business in which the agent was concerned. The decisive question was whether the non-resident principals were carrying on the business of selling in Andhra Pradesh and whether the appellant was the admitted agent through whom that business was carried on. On the facts found, the non-resident principals were carrying on sales in the State, and the appellant received the railway receipts from the principals, delivered them to buyers, and in some cases collected and remitted the sale proceeds. In those circumstances, the statutory fiction operated and the appellant fell within the scope of section 14-A.

Conclusion: The appellant was liable as a deemed dealer under section 14-A for the transactions in question, and the levy of sales tax was upheld against the assessee.

Final Conclusion: The appeals were unsuccessful, and the tax assessment against the appellant in respect of the relevant transactions stood affirmed.

Ratio Decidendi: Where a non-resident principal is found to be carrying on the business of selling goods in the State, the resident agent through whom that business is conducted is deemed to be the dealer and is liable to tax under the statutory fiction created by section 14-A.

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