LexSTATE OF WEST BENGAL versus O.P. LODHA AND ANR.
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STATE OF WEST BENGAL A v. O.P. LODHA AND ANR. MARCH 31, 1997 fSUHASC. SEN AND SUJATA V. MANOHAR, JJ.] B Bengal Finance (Sales Tax) Act, 1941: Sections 2 (c) and 6 (B ). Sales TaJ..~"Taxable tumovcr"-Scope of-Assessee sold goods 011 his own behalf as well as 011 behalf of principals 011 commission agency C basis-Assessee contended that his liability for sales tax on goods sold by him as a9e11t was limited only to the extent of liability of principals-Held: "Taxable twnover" covered goods sold by assessee on his own behalf as well as on behalf of p1i11cipals--Non-111ention of this aspect in definition of "tzunover'~.immaterial--Contention of assessee rejected. Words and Phrases: "Dealer''-Meaning of-In the context of S.2 (c}°ofthe Bengal Finance (Sales Tax) Act, 1941; D The business of the respondent-firm was to sell goods on its own E behalf and also on behalf of 24 other principals on commission agency basis. The Commercial Tax Officer (CTO) assessed the said firm to sales tax under Section 6-B of the Bengal Finance (Sales Tax) Act, 1941 on total turnover of the firm comprising of sales made by the firm on its own behalf as well as on b.ehalf of 24 principals for whom the firm acted as commis- F sion agent. Before the West Bengal Taxation Tribunal, the respondent-firm contended: (i) that the definition of 'dealer' under the Act did not permit the CTO to tax a dealer in respect of sales effected on behalf of the principals; (ii) that unlike the sales tax statues of other States, there were no specific words in the definition of 'turnover' in the Bengal Sales Tax G Act to include sales effected on behalf of the principals. The Taxation Tribunal held that the liability of the respondent-firm was confined to the sales effected by it on its own behalf. The Tribunal further held that the sales effected on behalf of 24 other disclosed principals as commission H 439 0 440 SUPREME COURT REPORTS [1997] 3 S.C.R. A agents had to be assessed separately. Hence this appeal. Allowing the appeal, this Court HELD : 1.1. Agents of all types have been included in the definition of'dealer' in Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941. The B clear intention of the legislature is to levy tax on an agent even when such ·agent is selling goods on behalf of disclosed principals. There has to be only one assessment on the agent in respect of his total turnover. No exception or exemption has been provided by the Act for sales made by a dealer as an agent. The charge of turnover tax has been imposed upon "every dealer" C whose gross turnover is in excess of a specified amount specified in Section 6-B of the Act. The incidence of taxation under Section 4 of the Act is on the gross turnover in excess of the taxable quantum of all sales effected by a dealer in a given period of time. [446-H, 447-A-B] 1.2. An agent who is a dealer is not entitled to any deduction on D account of the sales made by him for and on behalf of the principal. In fact, there is no sense in treating the agent on the one hand as a dealer for the purpose of levying sales tax on its taxable turnover and exclude from his turnover the sales made for and on behalf of others on the other hand. The mere fact that the agent is being treated as a dealer for imposition of sales tax precludes the argument that the real liability to pay the tax is on the E principal for and on whose account the goods are sold by the agent. The Act has made the agent directly liable to pay sales tax on his taxable turnover. There is no provision in the Act, which permits the Commercial Tax Officer to look beyond the sales effected by the agent and find out for and on whose behalf the sales have been effected. In fact, the argument that the liability F of the dealer must be determined by excluding the sales made for or on account of somebody else will nullify the charging section which levies tax on the agent himself. [ 448-E-H] 1.3. It is true that unlike some other State Acts, the Act has not defined 'turnover' specifically to include sales made by a dealer whether on G his own account or on account of somebody else. That, however, does not make any difference. Whether a person sells goods on his own behalf or on behalf of somebody else is quite Immaterial for the purpose of liability to tax. [449-B] Ramaswamy Gounder & Sons. v. State of Madras, 32 STC 350 (Mad.), H referred to. 0 ST A TE 1·. O.P. LODHA 441 2.
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