RAMALAKSHMANA AND COMPANY AND ANR. Vs. THE STATE OF MADRAS BY THE DEPUTY COMMERCIAL TAX OFFICER AND ANR.

JUDGEMENT

(1.) THOUGH the petitioners are different, as a common point arose their appeals were heard together by the Tribunal and the petitions directed against the appellate Orders are also posted together. The common point is whether the assessee, who is a commission agent, and therefore, a dealer as defined in the Madras General Sales Tax Act, 1959 is entitled to deduction from the turnover of excise duty paid on the goods by the common principal. That excise duty is deductible from the turnover is not in dispute but the Tribunal took the view that inasmuch as the commission agent was not the person who paid the excise duty, he would not be entitled to ask for deduction under rule 6 of the Madras General Sales Tax Rules, 1959.

(2.) WE are unable to accept that view. The transactions which were put through by the commission agent were really those of the principal and on his behalf. The commission agent will not normally be dealer, but for the purpose of assessment the expression 'dealer' has been so defined by the Act as to include a commission agent. On that account, the true nature of the transactions is not altered. Having defined a commission agent as a dealer in respect of transaction on behalf of his principal the Act provides for machinery to bring those transactions to tax at the hands of the commission agent as a measure of convenience. Once it is realised that the sales effected by the commission agent are really for and on behalf of the principal and the principal is entitled to deduction of excise duty from the turnover, U will at once become clear that the commission agent, who is assessed on the turnover, is also eligible to ask for deduction of excise duty from the turnover. The turnover is really the turnover of the principal and by a specific provision, that is taxed in the hands of the agent. That is why Rule 6 itself provides that while assessing the principal, he is entitled to deduction of the turnover that has been brought to charge in the hands of the agent. If the Tribunal's view is accepted, we do not see how the provisions relating to deduction of excise duty and deduction of the commission agent's turnover from the turnover of the principal could properly be worked. If for instance a commission agent is not allowed to deduct the excise duty from the turnover in his hands which is brought to charge, and the principal claims deduction of the entire turnover as provided by Rule 6, he will, on the interpretation placed by the Tribunal on the rule, he entitled to claim deduction of excise duty also. If both deductions are made, the assessee will get a double advantage. Apart from this, we are of opinion that the transactions being essentially those of the principal brought to tax in the hands of the dealer, notwithstanding the apparent tenor of the relative rules, the commission agent as a dealer will be entitled to deduction of excise duty from the corresponding turnover in his hands.