The provisions of section 14-A of the Madras General Sales Tax Act, 1939, apply to commission agents acting for non-resident principals, and such agents are liable to be assessed to tax under the Act irrespective of the amount of turnover of the business being less than the minimum specified in section 3(3).

Judgment

RAMASWAMI, J.

( 1 ) CIVIL Appeals Nos. 976 and 977 of 1965 are brought against the judgment of the Mysore High court dated the 24/01/1962, in Civil Revision Petitions Nos. 32 and 33 of 1961. Civil Appeal No. 978 of 1965 is presented against the judgment of the Mysore High court dated the 29/01/1962, allowing a writ petition of the respondent, viz. , Writ Petitionno. 543 of 1960, filed against the order of the Commercial Tax Officer, Additional Circle, Mangalore, South Canara. The respondents in these appeals were firms of commission agents having their place of business in Mangalore City in South Canara within the new State of Mysore. The respondents had been dealing mainly in areca. Their principals in area trade were residents of Malabar District and Kasargod Taluk in the former State of Madras. Every year the respondents used to take out licences under section 8 of the Madras General Sales Tax Act, 1939 (Madras Act No. 9 of 1939) (hereinafter referred to as the Act ). So, for the year 1956-57, the respondents took out licences in respect of their dealings as commission agents. On 1/11/1956, the States Reorganisation Act (Act No. 37 of 1956) came into force and as a result of that Act, some of the territories comprised in the former State of Madras became a part of the present Mysore State and some parts of the old Madras State became a part of the new Kerala State. Some of the principals of the respondents were residing either at Kasargod or in places in the former District of Malabar. After the States reorganisation all those principals who were residing in Kasargod Taluk which before the reorganisation was a part of South Canara District, or in the District of Malabar became "non-resident" principals within the meaning of the expression in section 14-A of the Act. The question that arises in these appeals is: Whether the respondents are liable to be taxed under section 14-A of the Act in respect of their turnover on the transactions effected on behalf of their principals residing either in the Kasargod Taluk or in places in the former District of Malabar for the period from 1/11/1956 to 31/03/1957. Section 8 of the Act as it stood on the 1/10/1956, reads as follows:- "the State government may on application and on payment of such fee as may be prescribed in that behalf, license any person under this section who for an agreed commission or brokerage buys or sells on behalf of known principals specified in his accounts in respect of each transaction and may exempt from the tax or taxes payable under section 3, such of his transactions as are carried out in accordance with the terms and conditions of the licence : Provided that, save where the transaction consists of a sale by a grower of produce grown by him or on his land, no such exemption shall be given unless the amounts for which the goods concerned in such transactions are sold, are included in the turnover of the principals or of the dealers from whom purchases were made, or would have been so included but for an exemption provided under this Act. Provided further that the commission or brokerage agreed upon and specified in the accounts represents the entire remuneration payable to the agent, apart from incidental charges in respect of insurance, transport, loading and unloading, godown rent, interest, correspondence, telegrams, the use of the telephone and the like, which are specified in the accounts and which the assessing authority considers legitimate: Provided also that the burden of proving that a transaction is exempt, by virtue of this section, from the tax or taxes payable under section 3, shall be on the licensee. " With effect from the 1/10/1956, the Madras Legislature added two more provisos to section 8 of the Act. Of the two provisos the last which is material to this case states : "provided also that the agent of a person or firm carrying on business outside the State shall not be eligible for a licence under this section in respect of his tra