1962 (8) TMI 60

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....ssessment year 196162. The turnover computed for the assessment year 1959-60 is Rs. 6,10,665 on which a tax of Rs. 12,213-30 is levied; the turnover computed for the assessment year 1960-61 is Rs. 21,91,168 on which the tax levied is Rs. 43,932-46 and the turnover computed for the assessment year 1961-62 is Rs. 14,86,730 and the tax levied is Rs. 29,956-96. Aggrieved by the orders of assessment made by the Commercial Tax Officer, Additional Circle, South Kanara, Mangalore, the petitioner has moved this Court under Article 226 of the Constitution to quash the orders of assessment alleging that on the proved facts, the assessing authority had no competence to make any levy of sales tax on the petitioner. The petitioner is a commission agen....

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.... the assessing authority can be justified on the language of the relevant provisions in the Act. Before proceeding to answer this question, we may conveniently dispose of a subsidiary contention advanced by the learned Government Pleader. It was contended by him that a commission agent in order to avoid being assessed to sales tax, should not deduct any sum from the price fetched, as incidental expenses; he can only deduct the commission agreed and nothing else. This contention evidently overlooks the second proviso to section 11 of the Act which reads thus: "the commission or brokerage agreed upon and specified in the accounts respresents the entire remuneration payable to the agent, apart from the tax paid by him on behalf of the princ....

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....bsp; The petitioner is admittedly a selling agent. Explanation 3 to section 2(t) of the Act says: "Notwithstanding anything to the contrary contained in this Act, two independent sales or purchases shall, for the purpose of this Act be deemed to have taken place- (a) when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser, or (b) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found- (i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate, or (ii) to have purchased the goods at one rate and to have passed them on to his principal at ano....

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....f any particular grade. Therefore it is not possible to agree with the learned counsel for the Revenue that there has been any contravention of explanation 3(b)(i). For that very reason, we are unable to agree with him when he contends that there is any contravention of explanation 3(b)(iii) of the Act. Quite clearly, he had accounted to his principals for the entire collection. No provision in the Act is brought to our notice which prohibits a commission agent from pooling the goods of the several principals even when those principals agree to such a pooling. We should not be understood as having laid down that if any pooling is done without the consent of the several principals the commission agent would become liable to pay sales tax. Th....