Commission Agents being dealer liable to sales tax.

The Chief Justice.-These appeals have been posted before a Full Bench because of a conflict of opinion between Division Benches of this Court (Province of Madras v. Sivalakshminarayana1, and Provincial Government of Madras v. Veerabhadrappa2) on the interpretation of some of the provisions of the Madras General Sales Tax Act, Madras Act IX of 1939. All these appeals arise out of suits filed for the recovery of amounts of sales tax alleged to have been illegally levied from the respective plaintiffs. Appeal Nos. 365, 468 and 551 of 1947 arise out of three original suits Nos. 12, 33 and 34 of 1946 which were disposed of by a common judgment by the learned District Judge of West Godavari at Ellore. All these suits were dismissed and the plaintiffs are the appellants before us. Appeal No. 447 of 1947 is from the decree dismissing O. S. No. 37 of 1945. This suit was disposed of by the same learned Judge who disposed of the three first mentioned suits. O. S. No. 93 of 1946 from which Appeal No. 641 of 1947 is the appeal was,, tried by another Judge, the learned Subordinate Judge of Ellore, who took a view different from that of the learned District Judge of West Godavari and decreed the suit. Hence the State of Madras is the appellant in this appeal. In all the appeals, common questions of law arise. Before these points are discussed, it is necessary to , set out in brief the salient facts in these cases which have a material bearing on the questions which fall for decision. But even before this it will be helpful to refer to the main provisions of the Madras General Sales Tax Act.

The object of the Act is to provide for the levy of a general tax on the sale of goods in the Province of Madras. The following definitions in section 2 of the Act are important. Section 2(b) defines a “dealer” as meaning any person who , carries on the business of buying or selling goods. “Sale” is defined in clause (h) thus:

“‘sale’ with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge, or pledge,

Explanation. (1)A transfer of goods on the hire-purchase or other instalment system of payment shall, notwithstanding the fact that the seller retains the title in the goods as security for payment of the price, be deemed to be a sale.”

Clause (i) defines “turnover” thus:

“Turnover means the aggregate amount for which goods are either bought by or sold by a dealer 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 grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee; tenant or otherwise, shall be excluded from his turnover:

Explanation. (1) Subject to such conditions and restrictions, if any, as may be prescribed in this behalf-

(i) the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof;

(ii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; and

(iii) where for accommodating a particular customer a dealer obtains goods from another dealer and immediately disposes of the same to the said customer, the sale in respect of such goods shall be included in the turnover of the latter dealer but not in that of the former.”

Section 3 is the charging section. Section 3(1) says:

“Subject to the provisions of this Act, every dealer shall pay in each year a tax in accordance with the scale specified......

Provided that any dealer whose turnover in any year is less than ten thousand rupees shall 1 not be liable to pay the tax under this sub-section

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