Decided on September 06,1972



CHENNAKESAV REDDY,J. - (1.) THESE 74 tax revision petitions by the several assessees are directed against a common order passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad, on 31st March, 1972, in Tribunal Appeals Nos. 20 to 93 of 1972 before it. In all these petitions, common questions have been raised for decision and they can, therefore, be conveniently considered together and disposed of by a common order.
(2.) THE essential facts are : All the petitioners carry on commission agency business in jaggery. The ryots, who prepare jaggery out of the surplus sugarcane, which they are unable to sell to the sugar factories in the area, sell that jaggery through the commission agents. The ryots pay commission to the agents for the services rendered by them. The only mode in which the agriculturists can realise the income from their surplus sugarcane crop is by converting it into jaggery and selling the same. The petitioners were all assessed to tax on their turnovers in respect of purchases and sales of jaggery of several ryot-principals by the concerned Commercial Tax Officers for assessment years ranging from 1964-65 to 1969-70. The monthly returns submitted by the assessees revealed that they collected certain amounts like rusum, kolagaram and "chamber cooli collection" for a part of the year while they collected sales tax for the rest of the year. The assessees claimed exemption from the levy of tax, but the same was disallowed by the assessing authorities. The assessees preferred appeals to the Assistant Commissioner of Commercial Taxes, Hyderabad. The Assistant Commissioner by his common order held that the "chamber cooli collections" formed part of the taxable turnovers of the assessees and that the inclusion of these amounts by the assessing authority in the taxable turnovers of the assessees was unassailable. He rejected the contention advanced on behalf of the assessees that the sales of jaggery effected by the commission agents on behalf of the ryot-principals cannot be regarded as sales by a dealer in jaggery as the ryot-principals themselves were not carrying on business in jaggery, but were only marketing their produce by converting sugar-cane into jaggery. As regards the other contentions that the assessees did not collect rusum and kolagaram by way of tax under section 9 of the Act 9 of 1970, the Assistant Commissioner held that rusum and kolagaram have to be treated as only tax collections taking into consideration the method and the manner in which they were collected. He, however, set aside the assessments on the disputed turnovers and remanded the cases to the concerned assessing authorities for fresh consideration and finalisation of assessments after rechecking the accounts of the assessees and ascertaining whether the assessees collected any tax in the guise of rusum or kolagaram. All the assessees preferred appeals to the Sales Tax Appellate Tribunal, Hyderabad. Before the Tribunal, the following three points were posed for decision : " (1) Whether the sales of jaggery effected by the appellants during the assessment years as commission agents on behalf of their ryot-principals are not liable to be taxed on the ground that their ryot-principals are not dealers and the sales of jaggery of those ryot-principals are not sales in the course of their business; (2) Whether the appellants are entitled to exemption from tax on their sales of jaggery during the assessment years under section 9 of the Andhra Pradesh General Sales Tax (Amendment) Act (9 of 1970), on the ground of non-collection of any amounts by way of tax on those sales; and (3) Whether the chamber collections made by the appellants do not form part of their taxable turnover. " The Tribunal set aside the finding of the Assistant Commissioner, namely, that the ryot-principals sold jaggery in the course of business with a view to get higher dividend and remanded the matter to the assessing authorities for determination of the question after due enquiry giving an opportunity to the assessees to produce such evidence as they desired. On the second question also, the Tribunal held that the finding recorded by the Assistant Commissioner that the amounts collected by the assessees in the name of rusum or kolagaram in fact represented tax was not based on any evidence gathered in an enquiry. Therefore, the Tribunal set aside the said finding and directed the assessing authorities to make fresh assessments after due enquiry to ascertain that these amounts were collected by way of tax. The Tribunal rejected the third contention of the assessees. The assessees have preferred these revision petitions against the said order of the Tribunal. The learned counsel for the assessees assailed the order of the Tribunal on two grounds, namely, (1) that the principals in question are not dealers and the sales of jaggery by those ryot-principals are not sales in the course of their business; and (2) that the petitioners are entitled to the benefit of section 9 of the Andhra Pradesh General Sales Tax (Amendment) Act (9 of 1970), as they did not collect any amount by way of tax.
(3.) BEFORE we proceed to consider these contentions we would pause to observe that sales tax or turnover tax which is one of the modern methods of indirect taxation is now an important element of national taxation. Sales tax was first introduced in this country for raising the revenues of the State in Madras State in 1939 by the Madras General Sales Tax Act, 1939. The Andhra area of the present State of Andhra Pradesh was then a part of the Madras State. When the Andhra State was carved out in 1953, the Madras General Sales Tax Act, 1939, with all its amendments was adopted in toto and made applicable to the newly formed Andhra State. In the Madras Act, commission agents were not expressly included in the definition of "dealer" in section 2 (b) of the Act. Commission agents of resident dealers were exempted from the levy of tax on their turnover provided they obtained the prescribed licence and strictly conformed to the conditions therein. With the dismemberment of the former Hyderabad State consequent to the reorganisation of States in 1956, the Telangana region of that State was integrated into the Andhra State and the new State of Andhra Pradesh was born on 1st November, 1956. The Hyderabad General Sales Tax Act, 1950, also modelled on the Madras Act was in force in the Telangana region. For obvious reasons it was not desirable to have two different Sales Tax Acts operating in different areas of the same State. Therefore, an integrated Andhra Pradesh General Sales Tax Act, 1957 (hereinafter called the principal Act), was passed and the Madras Act operating in the Andhra area and the Hyderabad General Sales Tax Act operating in the Telangana region were repealed. It is a trite saying that "of all debts men are least willing to pay the taxes". The provisions of the Sales Tax Act were questioned by dealers in the High Court and the Supreme Court. As a consequence of the judicial decisions interpreting the provisions of the Act and as a result of the practical experience gained by the assessing authorities enforcing the provisions, the law relating to the liability of commission agents on behalf of the resident principals to pay the tax on the sales of goods effected on behalf of the resident principals and the levy of tax on jaggery underwent a lot of change.;

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