Appeals Nos 397 and 398 of 1961
Appeals by special leave from the judgment and order dated September 19 1958 of the Andhra 249 Pradesh High Court in Tax Revision Cases Nos 62 and 63 of 1956
B Sen and B P Maheshwari for the appellants
K N Rajagopal Sastri and D Gupta for the respondents
April 19
The Judgment of the Court was delivered by HIDAYATULLAH J
These two appeals with special leave have been filed by Messrs G Gilda Textile Agency Vijayawada against the State of Andhra Pradesh
They are directed against a common order of the High Court of Andhra Pradesh in two revisions filed under section 12 B1 of the Madras General Sales Tax Act 1939 9 of 1939
The matter relates to the levy of sales tax from the appellant on its turn over for the years 1954 55
and 1955 56
The appellant was an agent of several non resident principals on whose behalf it booked orders and dealt with the indents
There were agreements between the non resident principals and the appellant and three such agreements contained in letters have been produced as instances and are marked Exs
A 3 A 3a and A 3b
Under these agree ments the appellant was appointed as indenting agent in Andhra Pradesh for cloth merchants who admittedly resided and carried on business outside Andhra Pradesh
It was required to book orders and to forward them to the principals receiving commission on sale of goods despatched to Andhra Pradesh
In some cases this commission was only available on the orders booked by the appellant and in others on all the sales effected by the principals in this territory
The appellant did business in three different ways which have been described as three separate categories in the case
In the first 250 category the appellant took delivery of the goods found buyers and delivered the goods to the buyers
This a category of sales was hold to be within the Madras General Sales Tax Act and the appellant liable to the tax
The appellant does not question this part of the decision
The second category was in which it merely booked orders and forwarded them to Bombay and the principals sent the goods with the railway receipts through the bank to the purchasers in Andhra Pradesh
The connection of the appellant was Dot considered sufficient to constitute it the dealer as defined in the Madras General Sales Tax Act and such sales were omitted from the turnover
No dispute therefore arises about this category
The third category related to goods sold by the outside dealers to buyers in the State
The appellant in these transactions besides booking orders received the railway receipts from the outside principal handed them over to the buyers and sometimes collected and transmitted the amounts to the outside principal
The period involved is covered by the Sales Tax Validation Act 1956 7 of 1956 and no question under the Constitution arises
The only question is whether the appellant comes within section 14 A of the Madras General Sales Tax Act and it liable to tax Act as a dealer
It may be pointed out that the appellant did not produce any correspondence between it and the non resident principals or the covering letters which must have been sent along with the railway receipts
The Tribunal under the Madras General Sales Tax Act therefore came to the conclusion that the railway receipts which had been sent must have been endorsed by the sellers either in favour of the appellant or in blank to enable the appellant to claim the goods from the railway or to negotiate them
The Tribunal before hold that the appellant 251 must be deemed to be a dealer under s14 A and thus liable to tax under that section
Section 14 A of the Act reads as follows In the case of any person carrying on the business of buying and selling goods in the State but residing outside it hereinafter in this section referred to as a non resident  the provisions of this Act shall apply subject to the following modifications and additions namely i In respect of the business of the non resident his agent residing in the State shall be deemed to be the dealer
ii The agent of a non resident shall be assessed to tax or taxes under this Act at the rate or rates leviable thereunder in respect of the business of such non resident in which the agent is concerned irrespective of the amount of the turn over of such business being less than the minimum specified in Section 3 sub section 3
iii Without prejudice to his other rights any agent of a non resident who is assessed under this Act in respect of the business of such non resident may retain out of any moneys payable to the non resident by the agent a sum equal to the amount of the tax or taxes assessed on or paid by the agent
iv Where no tax would have been payable by the non resident in respect of this business in the State by reason of the turnover there of being less 252 than the minimum specified in Section 3 sub section 3 he shall be entitled to have the amount of the tax or taxes paid by his agent refunded to him or application made to the assessing authority concerned or where more than one such authority is concerned to such one of the authorities as may be authorised in this behalf by the State Government by general or special order
v Such application shall be made with in twelve months from the end of the year in which payment was made by or on behalf of the non resident of the tax or taxes or any part thereof
 The section makes the agent liable fictionally as a dealer in the circumstances laid down in the section viz that be is acting on behalf of a nonresident person doing business of buying or selling goods in the State
The agent is assessed to tax under the Act in respect of the business of such non resident in which the a cut is concerned irrespective of whether the turnover of such business is more or less than the minimum prescribed in the Act
It is contended that the first thing to decide is whether the non resident could be said to be carrying on the business of selling in Andhra Pradesh in the circumstances of this case and reliance is placed upon a decision of this Court reported in Mahadayal Premchandra vs Commercial Tax Officer Calcutta 1 In that case this Court was called upon to consider the Bengal Finance Sales Tax Act 1941 6 of 1941
There also the agent was sought to be made liable in respect of the sale of goods belonging to non resident 1  253 principal under a section which may be taken to be in pari materia with the section we are considering
This Court held that the Kanpur Mille whose agent the appellant in the case was were not carrying on any business of selling goods in West Bengal and were selling goods in Kanpur and despatching them to West Bengal for consumption
This part of the judgment is called in aid to show that the first condition of the liability of the agent in the present case under the Madras General Sales Tax Act is not fulfilled
Unfortunately for the appellant in this case there is a clear finding by the High Court that the non resident principals were carrying on the business of selling in Andhra Pradesh
The High Court has observed that if the non resident principals took out railway receipts in their own Dames thereby manifesting their intention to remain the owners and to retain
the control over the goods the sales must be taken to have been completed or to have taken place in the State of Andhra Pradesh
From this the High Court came to the conclusion that the non resident principals were doing business of selling in Andhra Pradesh
The High Court pointed out that inasmuch as the appellant after securing the orders received the railway receipts from the sellers and banded them over to the buyers and sometimes collected the consideration and transmitted the same to the sellers the sales thus resulting must be hold to have taken place in the State either on behalf of the appellant or on behalf of the non resident principals and whichever view be correct the appellant as agent was liable as a dealer within the Act
Either it was a dealer itself or it became a dealer by the fiction created by section 14 A since the non resident principals had done business in each case in the State of Andhra Pradesh
The case of this Court on which reliance has been placed turned on its own facts and a 254 finding there cannot be used in the present case because no finding on the facts of one case can be applied to the facts of another
Sub section 2 of section 14 A was said to be connected with the opening part and it was argued that the tax was leviable on the turnover relating to the business of a nonresident which was carried on by the non resident in the taxable territory
In our opinion once the finding is given that the non resident principal carried on the business of selling in Andhra Pradesh and the appellant was the admitted agent through whom this business was carried on the rest follows without any difficulty
The High Court in our opinion was therefore right in upholding the levy of the tax from the appellant in view of our decision that the appellant came within the four corners of section 14 A in relation to the transactions disclosed in the last category
The appeals fail and are dismissed with costs one hearing fee
Appeals dismissed


Summary:
The appellant was an agent in Andhra Pradesh of certain non resident principals who were dealers in cloth
received commission in some cases on the orders booked and in others on all the sales effected by the principals in the terri tory
One kind of transactions it carried on in course of its business related to goods sold by its principal to buyers in the State
The appellant in these transactions besides booking orders received the railway receipts from the outside principals handed them order to the buyers and some times collected and transmitted the amount to the outside principals
The appellant was assessed to sales tax on its turnover for the years 1954 55 and 1955 56
The question was whether in carrying on such transactions the appellant was a dealer within section 14A of the Madras General Sales Tax Act 1939
The Tribunal held that the appellant was such a dealer and the High Court in affirming that decision held that the non resident principals were doing the business of selling in the State and the sales in question were by the appellant either on behalf the principal or on its own behalf and that the appellant was in either cass liable
Held that the High Court had taken the right view the matter
Section 14A of the Act made the agent fictionally liable as a dealer in the circumstances as specified by it and the agent was liable irrespective of whether the turn over of its business was more or less than the minimum prescribed by the Act
Mahadayal Premchandra vs Commercial Tax Officer Calcutta  distinguished