TaxTMI 
TaxTMI 
1997 (3) TMI 505
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....e business of the firm is to sell goods on its own behalf and also on behalf of 24 other principals on commission agency basis. The Commercial Tax Officer, Colootola Charge, assessed the firm to sales tax under section 6B of the Bengal Finance (Sales Tax) Act, 1941 on total turnover of the firm comprising of sales made by the firm on its own behalf as well as on behalf of 24 principals for whom the firm acted as commission agent. The firm preferred an appeal to the Assistant Commissioner of Commercial Taxes who agreed with the Commercial Tax Officer. The West Bengal Commercial Taxes Tribunal on further appeal, also took the same view. 2.. On further appeal, the West Bengal Taxation Tribunal came to the conclusion that the assessment of the firm by including in its turnover sales made by it as commission agent of 24 other principals was erroneous in law. It was of the view that the liability of the firm and others for sales tax was confined to the sales effected by it on its own behalf. The sales effected on behalf of 24 other disclosed principals as commission agents had to be assessed separately. 3.. The contention made on behalf of the firm which found favour with the Taxat....
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....f his total turnover. No exception or exemption has been provided by the Bengal Finance (Sales Tax) Act, 1941 for sales made by a dealer as an agent. Section 2(c) of the Bengal Finance (Sales Tax) Act defines "dealer" as under: " 'dealer' means any person who carries on the business of selling goods in West Bengal or of purchasing goods in West Bengal in specified circumstances or any person making a sale under section 6D and includes- the Central or a State Government, a local authority, a statutory body, a trust or other body corporate which, or a liquidator or receiver appointed by a court in respect of a person defined as a dealer under this clause who, whether or not in the course of business sells, supplies or distributes directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration. Explanation 1.-A co-operative society or a club or any association which sells goods to its members is a dealer. Explanation 2.-A factor, a broker, a commission agent, a del credere agent, an auctioneer, an agent for handling or transporting of goods or handling of document of title to goods or any other mercantile agent, by whate....
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....y charged as turnover tax payable under section 6B during such period: Provided that an election as aforesaid once made shall not be altered except with the permission of the Commissioner and on such terms and conditions as he may think fit to impose: Provided further that where before or after the date of the coming into force of clause (f) of section 2 of the Bengal Finance (Sales Tax) (West Bengal Amendment) Act, 1950 (W.B. Act XLVIII of 1950), the calculation of the turnover for any period prior to such date was or is made on the basis of the sale prices or parts of sale prices receivable during such period, the calculation shall not be called in question merely on the ground that it was or is so made; and no return furnished, no assessment made, no proceedings (including in particular proceedings for the recovery of any tax or penalty) taken, no order passed and no notice issued whether before or after such date shall be called in question on the ground that it was or is based on turnover so calculated;" Section 6B which is the charging section read as under: "6B. Liability to payment of turnover tax and rate thereof.-(1) Notwithstanding anything contained elsewher....
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....e fixed by a notification issued in the official Gazette. Taxable quantum has been defined in sub-section (5) of section 4 to mean: (a) in relation to a dealer who imports for sale any goods into West Bengal-Rs. 20,000. (b) in relation to any dealer who manufactures or produces any goods other than cooked foods, for sale-Rs. 50,000. (c) in relation to any dealer who manufactures or produces cooked foods for sale-Rs. 1,00,000. (d) in relation to any other dealer-Rs. 2,00,000. "Taxable turnover" has been defined by section 5(2) as under: "5(2) In this Act, the expression 'taxable turnover' means in the case of a dealer who is liable to pay tax under section 4 or under sub-section (3) of section 8, that part of his gross turnover during any period which remains after deducting therefrom- (a) his turnover during that period on- (i) the sale of goods declared tax-free under section 6; (ii) sales to a registered dealer of goods, other than iron and steel, rice and wheat, referred to in section 14 of the Central Sales Tax Act, 1956 (74 of 1956) specified in the certificate of registration of such dealer as being intended for resale, other than that by way of ....
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....mined by excluding the sales made for or on account of somebody else will nullify the charging section which levies tax on the agent himself. 7.. It is true that unlike some other State Acts, the Bengal Finance (Sales Tax) Act, 1941 has not defined "turnover" specifically to include sales made by a dealer whether on his own account or on account of somebody else. That, in my judgment, does not make any difference. If a person sells goods on his own account, he is liable not as an agent but as a seller. But when he sells on behalf of somebody else or on account of somebody else, then he sells the goods as an agent of the principal. Such agents have been made liable to pay tax by the enlarged definition of the word "dealer" in the Act. If the sales effected by the dealer exceeds "taxable quantum" or the total sales exceeds the taxable turnover, he will be liable to pay tax under section 4 or section 6B of the Bengal Finance (Sales Tax) Act, 1941. Whether such persons sell goods on his own behalf or on behalf of somebody else is quite immaterial for this purpose. 8.. In my judgment, the scheme of the Act leaves no room for doubt that an agent who sells goods on behalf of ....
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....y carried on the business as an auctioneer under a licence issued to it under the Cardamom Act read with the Cardamom (Licensing and Marketing) Rules, 1977. The mode of selling cardamom was that the planters left their produce with the society and the society after mixing the produce of all the planters put the same to auction. The society used to collect one per cent as commission out of the sale proceeds from each of the planters. Besides cardamom, the society also sold goods on their own. 11. The question in that case was how far was the society liable to pay the surcharge under the Kerala General Sales Tax Act, 1963. The Kerala Act imposed sales tax on every dealer whose total turnover in a year exceeded a specified sum which varied from year to year. In 1957, the Kerala Legislature introduced a surcharge on sales tax payable by a dealer whose turnover exceeded Rs. 30,000 a year. An important feature of this surcharge was that unlike sales tax, the seller could not pass on the burden of this surcharge to the consumers and had to bear it himself. 12.. The society's contention was that it sold goods in its capacity as commission agent for various principals and on th....
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....sessed by the officer assessing the particular commission agent. The assessment order on the commission agent would then have to be split up, as it were, into a number of parts each containing the determination of turnover, tax and surcharge qua each of the constituents. These determinations require exercises which cannot be practically undertaken by an officer assessing a commission agent but can easily be undertaken by the different officers assessing the principals. That is why the statute evolved a very simple procedure to meet the situation. It brought the commission agent within the definition of a dealer and made his aggregate turnover liable to tax. But it provided at the same time that the turnover so included and taxed in the hands of the agent should be excluded from the turnover of the principal, where he is separately assessed. 15.. We are of the view that basically, the West Bengal Act is on similar lines as the Kerala Act. An agent as a dealer has been made directly liable to pay sales tax for good reasons. The Act has not provided for splitting of the sales made by the dealer for and on behalf of different principals and make separate assessment on the dealer. It....