LexCARDAMOM PLANTERS ASSOCIATION BODINAYAKANUR versus DEPUTY COMMISSIONER OF SALES TAX (LAW) BOARD OF REVENUE (TAXES) ERNAKULAM
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CARDAMO¥ PLANIBRS ASSOCIATION BOD INA Y AKANUR v. DEPUTY COMMISSIONER OF SALES TAX (LAW) BOARD OF REVENUE (TAXES) ERNAKULAM AUGUST 7, 1989 .,.., [SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] A. B The Kera/a (Surcharge on Taxes) Act 1957-Section 3-Levy of surcharge on Sales Tax-Society composed of Cardamom growers- l Whether liable for levy of Surcharge in respect of sales effected on C 'behalf of members of society. The appellant-assesse is a Society registered under the Societies Registration Act. Its members are Cardamom growers in the State of Kerala. The Society conducts the business as an auctioneer under a licence issued to it under the Cardamom Act (Act 42 of 1965) read with D the Cardamom (Licensing and Marketing) Rules, 1977, one of the Conditions of this licence being that as an auctioneer it shall not charge more than one percent of the sale price as commission for the services rendered by it. It is common ground that the society bas obtained the relevant licence and the individual members/growers of Cardamom bad no such licence. The mode of the business was that planters left their E produce with the Society and the Society after mixing the produce of all the growers, put the same to auction. The Society collected 1% as com- mission out of the sale proceeds from each of the planters. Besides cardamom, the Society sold other goods also. [ The Kerala General Sales Tax Act 1963 imposes sales tax on every 1-- dealer whose total turnover for any year exceeds a specified sum which ' differed from year to year. In 1957 the,Kerala Legislature introduced a surcharge on sales tax. Section 3 of the Kerala Surcharge on taxes Act 1957 prescribes that the tax payable under the Kerala General Sales Tax Act 1963, shall, in the case of a dealer whose turnover exceeds Rs.30,000 a year, be increased by a surcharge at the rate of 5% of the tax payable for th2t year. The provisions of the Kerala General Sales Tax Act were made applicable to the levy and collection of the said J- surcharge. Kerala Act 40of1976 stepped up the·rate of sur<harge. The important feature of the latter Act is that unlike sales tax, which the dealer was entitled to get reimbursed from the purchaser of the goods sold by him, the surcharge had to be borne by lhe dealer himself, as 719 F G H 720 SUPREME COURT REPORTS [ 19891 3 S.C.R. A Sub-Section (2) of Section 3 of lbe Surcharge Act prohibited the dealer ~ from collecting lbe surcharge payable by him. Further the dealer might be liable for sales tax al different rates on the turnover of the different goods dealt with by him, be was to pay surcharge calculated on tbe amount of tbe sales tax payable by him in respect of bis total dealings B throughout the year. 1 • The assessee's contention was that the Society sold goods only in its capacity as a commission agent for various principals and that on lbe general principle of agency' an agent like the assessee could be liable '':_) surcharge only to the same extent as tbe principal whom ii represented On this plea, it could not be made liable for any surcharge in respect of c the sales effected by it on behalf of lbe principals whose sales through ·~ the Society did 1101 exceed the limits set out in Sec. 3(1) of the Surcharge Act. The Tribunal bad accepted the above contention of the appellant In the appeals against the assessment for the assessment years 1967-68 ... ~ D to 1969-70. The sales Tax assessments of the appellant for the assess- menl years 1973-74 to 1976-77 were completed by lbe Sales Tax Officer following the aforesaid order of the· Tribunal. These assessments were set aside by the Dy. Commissioner of Sales Tax wbo took the view that • tbe Society was liable to pay surcharge on its aggregate turnover in each of tbe assessment years. The appellant-assessee preferred appeals to the E Appellate Tribunal against lbe orders of the Deputy Commissioner. The Tribunal allowed the appeals following its order relating to lbe earlier assessment years. II accordingly set aside the orders of the Dy. Commissioner and restored the assessments made by tbe Sales Tax Off'icer for the assessment years 1973-74 to 1976-77. The Department -+ moved revision petitions before the High Court against tbe order of the F Appellate Tribunal. The High Court accepted tbe revision of lbe Department and set aside the order of the Tribunal. Hence these ap- peals by tbe assessee. II was contended
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