Sales tax exemption for agents depends on disclosure of known principals, and contractual limits can defeat the claim.

Sales tax exemption under the relevant provision was available only where an agent sold for agreed commission on behalf of known principals, with each principal identified in the accounts and the sales made within the licence terms. Even if an agency relationship existed, the distributor agreement prohibited the dealer from transacting in the company's name or representing itself as the company's agent. That contractual bar prevented sales being made or disclosed as required by the statute, so the exemption claim failed.

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Issues: Whether the respondent was entitled to exemption from sales tax under section 9 of the General Sales Tax Act on the footing that it acted as agent of Caltex (India) Ltd. and sold the kerosene on behalf of known principals in accordance with the licence.

Analysis: The relevant exemption was available only to an agent who, for an agreed commission, sold on behalf of known principals specified in the accounts for each transaction and acted within the terms of the licence. Even assuming that the agreement created an agency, clause 8 of the agreement forbade the distributor from transacting business in the company's name or on its behalf and from representing itself as the company's agent. That contractual prohibition meant the respondent could not sell expressly on behalf of Caltex (India) Ltd. or disclose that principal to purchasers in the manner required by section 9.

Conclusion: The respondent was not entitled to exemption under section 9, and the appeals succeeded for the Revenue.

Final Conclusion: The order of remand made by the High Court was set aside and the assessment exemption claim failed, because the contractual terms themselves prevented the respondent from satisfying the statutory conditions for exemption.

Ratio Decidendi: A dealer can claim exemption only if the agency arrangement and its contractual terms permit sales expressly on behalf of known principals in the manner required by the taxing statute; a contract that forbids such disclosure and representation defeats the statutory exemption even if an agency otherwise exists.

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