C V RAMASWAMY GOUNDER Vs. STATE OF MADRAS

JUDGEMENT

(1.) THIS tax case has been filed by the assessees against the order of the Board of Revenue passed in a suo motu revision under section 34 of the Tamil Nadu General Sales Tax Act, 1959. The assessees are dealers in turmeric and oil at Erode and they were assessed to tax for the year 1961-62 on a taxable turnover of Rs. 4, 95, 597.74 by the assessing authority on 9th July, 1964. While determining the taxable turnover the assessing authority rejected the claim of the assessees for exemption, inter alia, on a turnover of Rs. 1, 23, 878.50 being the commission sales of turmeric to self on behalf of agriculturist-principals.

(2.) AGGRIEVED against the rejection of the claim, the assessees preferred an appeal before the Appellate Assistant Commissioner, who, by his order dated 6th January, 1966, cancelled the assessment on the said turnover of Rs. 1, 23, 878.50 holding that the assessees have acted only as agents of the agriculturist-principals, that they have not sold goods to anybody except themselves and that, therefore, the transactions do not fall under sales liable to tax. The Board of Revenue examined the order of the Appellate Assistant Commissioner with the connected records and found that the assessees were the selling agents of agriculturists on commission basis, that they had also at times effected purchases of turmeric for resale on their own account from the agriculturist-principals, that out of the turmeric received from the agriculturists for sale on commission basis, the assessees have appropriated to their own account the turmeric valued at Rs. 1, 23, 878.50 during the assessment year, and that, therefore, the assessees are liable to tax on the sales effected by them as selling agents of the agriculturist-principals to themselves, even though they had in fact paid tax on their own sales of turmeric to third parties. According to the Board of Revenue, the transaction by which the turmeric reached the hands of the third parties involved two sales, one by the agriculturists to the assessees and the other by the assessees to third parties, and that though the latter sales effected by the assessees to third parties had been subjected to tax, the assessees cannot escape their liability to pay tax on the sales effected by them as selling agents of the agriculturist-principals to themselves. In this view the Board restored the order of the assessing authority and subjected the turnover of Rs. 1, 23, 878.50 to tax at 2 per cent.Before us, it is contended on behalf of the assessees that the assessees having paid tax on their sales to third parties they are not liable to pay tax once again on the purchases effected by them from the agriculturist-principals. We are not willing to accept the contention of the assessees that tax is levied on the assessees in respect of the turnover in dispute as the buyers of turmeric from the agriculturist-principals. It is true that turmeric is taxable only at the sale point, and it is the seller who is liable to tax. But, in this case, the assessees have not been taxed as buyers of turmeric from agriculturists, but as the selling agents of the agriculturist-principals, who had effected sale of turmeric to themselves. There is no dispute that the assessees sold turmeric on behalf of the agriculturist-principals to themselves for resale on their own account and earned their selling agency commission. Therefore, there cannot be any doubt that the assessees sold goods of the agriculturist-principals to themselves.

(3.) IN the above case, the Supreme Court was considering a case of exemption which an agent claimed on the ground that his principal was entitled to such exemption. But the question here is whether the transactions effected by the agent as a dealer could be grouped together for the purpose of finding out the total turnover in his hands. The statute which specifically made the agent a dealer in particular circumstances makes all the transactions effected by him in that capacity as forming part of his turnover. "Turnover" has been defined in section 2(r) of the Act as follows : "Turnover' means the aggregate amount for which goods are bought or sold, or supplied or distributed, by a dealer, either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, other than tea grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover." This definition makes the position clear that all the transactions effected by the agent, either on his own account or on account of others, should be aggregated for finding out the turnover of the agent as a dealer. We are, therefore, of the view that the definition of "turnover" in section 2(r) squarely answers the contention put forward on behalf of the assessees. The result is the tax case is dismissed with costs. Counsel's fee Rs. 150.