TaxTMI 
TaxTMI 
1985 (12) TMI 350
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....ssion agents under an agreement entered into between them. The sales were being effected by the agent to various dealers on wholesale basis and the sales tax was collected by the commission agent. 2.. For the assessment periods 1st April, 1976, to 31st March, 1977, and 1st April, 1977, to 31st March, 1978, it was seen on verification by the department that tax for the two periods had not been paid by the Gekayel Enterprises. Therefore, a proposition notice in form No. 31-A was issued on 8th March, 1979, for the year ending 31st March, 1977, and on 17th December, 1981, for the year ending 31st March, 1978, produced as annexure B in each of the writ petitions. After hearing the representative of the petitioner-company the assessments for b....
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....efined under sub-section (e) of section 2 of the Act as a person by whom a tax is payable. "Dealer" is defined under section 2(k) of the Act as follows: "2. (k) 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration" and includes: "(iii) a commission agent, a broker or del credere agent or an auctioneer or any other mercantile agent by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal." Under section 11 of the Act, an agent is made liable to pay tax in respect of sale or p....
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....ility of the principal is concerned. In this context it may be useful to reproduce the Statement of Objects and Reasons while the Bill was introduced in the State Legislature. "Under the existing provisions of the Bill, agent is taxed as qua agent and not as a dealer. The agent's liability is, therefore, coextensive with that of his principal and if the principal cannot be taxed in respect of a transaction his agent also cannot be taxed. It is proposed to modify the applicability of law of agency to the assessments under the Bill by providing that the turnover effected by the agents, who is also a dealer under the Bill, shall be deemed to be his own turnover for the purposes of levying tax." This is only clarificatory and does not int....
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.... agent alone was liable to pay the tax. This contention was upheld by the Tribunal and later reversed by the High Court, which held that section 11 was only an enabling provision to make the agent liable to pay the tax and further that the principal who is also a "dealer" as defined in section 2(1)(k) of the Act would still be assessable under the Act. 11.. This view was further reiterated in a later decision of this Court in G. Pampapatheppa & Sons v. Commissioner of Commercial Taxes (Sales Tax Appeals Nos. 21 and 22 of 1976 disposed of on 11th January, 1979) (printed at page 373 infra). The Deputy Commissioner in the appeals by the assessee in that case, had taken the view that only the commission agent should be assessed and not the p....
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.... a limited way is a machinery provision. I agree with his Lordship's view. 14.. On facts, it is stated by Sri Dattu, learned High Court Government Pleader, that there was no assessment made against Gekayel Enterprises who are the agents for the two periods in question. Therefore, assessments made against the principals for the two periods are justified in law and there is no reason to interfere with the same. Writ petitions are accordingly dismissed. Writ Petitions dismissed. Appendix [The judgment of the Division Bench of the Karnataka High Court consisting of E.S. VENKATARAMIAH and RAMA JOIS, JJ., in G. Pampapatheppa & Sons v. Commissioner of Commercial Taxes in Karnataka, Bangalore (Sales Tax Appeals Nos. 21 and 22 of 197....