PARAKKOTAN ALIPPI SAHIB Vs. PROVINCE OF MADRAS
LAWS(MAD)-1953-8-24
HIGH COURT OF MADRAS
Decided on August 17,1953

PARAKKOTAN ALIPPI SAHIB Appellant
VERSUS
PROVINCE OF MADRAS, REPRESENTED BY THE COLLECTOR OF MALABAR Respondents

JUDGEMENT

Rajagopalan, J. - (1.) The plaintiff-appellant was a merchant as well as a commission agent at Tellicherry. As a commission agent, he sold goods on behalf of known principals and he also bought goods on behalf of known principals. The dealings were apparently mainly in pepper and cashewnuts. In 1944-45, his business turnover- for the business he did on his own was Rs. 2,22,563-5-9. His liability to sales tax on this turnover was never in dispute. For the same period, he showed his turnover as a selling agent, i.e., a commission agent selling goods on behalf of known principals, at Rs. 8,89,297-11-5. As a buying agent, his turnover was Rs. 88,684-0-0. He was assessed to a sales tax of Rs. 9,779-13-1 on these two items. The plaintiff filed the suit out of which this appeal arose for a declaration that the levy of sales tax on his turnover as a commission agent, i.e., both as a selling and as a buying agent, was illegal.
(2.) The claim was resisted, among others, on the ground that the plaintiff collected commission both from the buyer and seller, and that the plaintiff allowed unauthorised rebates to some of the buyers; but these contentions were negatived by the learned Subordinate Judge. The learned Subordinate Judge, however, upheld the contention of the defendant, that the collection by the plaintiff of certain amounts as 'dharmam' and 'dhallal', which amounts were not disclosed to the principals of the plaintiff, and which amounts were not accounted for by the plaintiff to his principals, was in violation of the terms of the licence issued under Section 8 of the General Sales Tax Act and that therefore the plaintiff was liable to be assessed also on his turnover as a commission agent.
(3.) Though the plaintiff called himself a commission agent, from the nature of the business, he would certainly appear to be a "dealer" as defined by the General Sales Tax Act. That was held by a Full Bench of this court in -- 'Radhakrishna v. Province of Madras', . The real question, therefore, is, is the plaintiff entitled to the exemption granted by Section 8 of the Act? That is, did the collection of the 'dharmam' and 'dhallal' by the plaintiff the benefit of which did not go to his disclosed principals, amount to a violation of the terms of the licence granted to the plaintiff to carry on business as a commission agent within the meaning of Section 8 of the Act?;


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