TaxTMI 
TaxTMI 
2000 (6) TMI 785
X X X X Extracts X X X X
X X X X Extracts X X X X
....n yarn at Coimbatore, both independently and also as consignment agent for non-residential principals. On examination of the records recovered during inspection made on August 9, 1983, the assessing authority found that the assessee at Bijapur in Karnataka State had despatched cotton yarn from Bijapur to Coimbatore through Chagan textiles. The above transaction was by way of consignment sale to the agent Satish Kumar Agarwal. The agent has given the sale bills and declaration in form F to enable the Karnataka mill to claim exemption from sales tax. But the agent did not render accounts for the sale of the goods in Tamil Nadu. The assessing authority proceeded to say that the introduction of the intermediary, namely, the agent, does not abso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llate Tribunal upheld the assessment made against the principal at Karnataka, but deleted the penalty imposed on the assessee. The assessee filed the two revision petitions against the order of the Sales Tax Appellate Tribunal to the extent that they have been held liable to tax in respect of the disputed transactions. According to Mr. K.J. Chandran, the learned counsel for the petitioner, the assessee was not at all carrying on any business in the territory of Tamil Nadu and they had appointed agents to sell goods and the goods were transported to Coimbatore on consignment basis and therefore, it is the agents at Coimbatore who are liable to pay tax. Inasmuch as the agents have handled the goods and are physically available, there wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the business of buying, selling, supplying or distributing goods on behalf of any principal." Rule 6(h) of the Tamil Nadu General Sales Tax Rules, 1959 which is relied on by the Revenue is as follows: "the turnover of sales or purchases made by a dealer through his agent in respect of which tax has been paid by the agent shall subject to the condition specified therein be deducted from the total turnover of a dealer." 5.. We can dispose of the implication of rule 6(h) before taking up the argument on the main section. Rule 6(h) only says that if the agent has paid the tax on the turnover of sales or purchases made by the principal, such payment shall be deducted from the turnover of the principal. In this case we are more conce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lone was collecting tax on the sales effected by them and no assessment can be made against the principal. The contention of the principal before the High Court was that under section 11 of the Karnataka Sales Tax Act, 1957 it is the agent that should be assessed to tax in respect of the sales effected by him on behalf of the principal. The argument was rejected. In the said Karnataka Sales Tax Act, 1957 section 11 says that an agent is made liable to pay tax in respect of a sale or purchase made on behalf of any principal. The proviso to the said section is as follows: "Provided that the principal, shall not be assessed to tax on his turnover in respect of which, the agent is liable to tax or taxes under sub-section (1) and the burden o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ations of the Supreme Court is apposite: "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." 9.. On the facts of the present case we have no doubt in mind that the agent was liable to be assessed and if that is so there is no question of making an assessment against the principal also in respect of the very same transaction. As rightly contended by the petitioner the respondent could have made an assessment aga....