Case: Commissioner, Sales Tax, U.P Vs. M/s. Suraj Prasad Gauri Shanker

1. These appeals by special leave arise from the decision of the Allahabad High Court in Sales Tax Reference No. 297 of 1967 on its file. In that case the High Court was considering a reference under Section 11 (1) of the U. P. Sales Tax Act 1948 (hereinafter to be referred to as the Act). The question referred for the opinion of the High Court was :"Wheter on the facts and in the circumstances of the case, the assessee acting as Commission Agent was liable to pay Sales Tax in the years62 on the turnover of Khandsari sugar manufactured by his principles ?"The assessee was carrying on the business of commission agency in Varanasi. He is also a dealer inand Kirana. In this case we are only concerned with his dealings in Khandsari sugar. In respect of the assessment years in question a dispute arose between him and the Sales Tax Officer as to his liability to pay tax on the turnover relating to Khandsari sugar sold by him as Commission Agent, on behalf of his principals who manufactured sugar in U. P. Act this stage it may also be noted that the Khandsari Sugar with which we are concerned in this case was not subjected to any additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Reasoning: 4. Khandsari sugar with which we are concerned in this case was manufactured in U. P. That being so we are in agreement with the the High Court that only the sales by the manufacturers are liable to be brought to tax under the Notification. The Notification referred to earlier, in our opinion, takes the present case outside the scope of Section 3 of the Act. The sales effected by the Commission Agent in view of that Notification must be considered as sales by the manufacturer himself. Consequently it is only the manufacturer that could have been taxed in respect of the turnover relating to those sales and not the Commission Agent.5.Mr. Karkhanis, the learned counsel for the appellant, relied on certain decisions rendered by some of the High Courts, namely, Irri Veera Raju v. The Commercial Tax Officer, Tadapalligudem, (1967) 20 STC 501 (Andh Pra), Ramalakshmana and Co. v. State of Madras, (1968) 21 STC 35 (Mad)   and Commissioner of Sales Tax v. Ganga Ram Ghuray Lal, (1971) 27 STC 109 (All)  .None of those decisions have any bearing on the point in issue in this case. If at all, the ratio of the decision in Irri Veera Rajus case (supra) runs counter to the arguments advanced on behalf of the appellant.