- (1.) This batch of Appeals is by Certificate against a common Judgment of the Andhra Pradesh High Court dismissing the Writ Petitions filed by several dealers in Jaggery who challenged the vires and constitutionality of Sections 2, 5, 8 and 9 of the Andhra Pradesh General Sales Tax Amendment Act (9 of 1970) (hereinafter called the "Amendment Act"). The Appellants are Commission Agents carrying on trade in jaggery. Agriculturists who prepare jaggery out of surplus sugarcane which they are unable to sell to the Sugar factories employ the Appellants as their Commission Agents to sell that jaggery.
(2.) We will take the facts in Civil Appeal No. 2116 of 1970 as typical of the common question arising in all these Appeals. The Appellants carry on business of Commission Agent in jaggery in Anakapalli, Visakhapatnam and at various places in West Godavari. In the course of their business the Appellants arrange for the sale of jaggery charging a small commission for their services and renders an account to the respective principals in respect of these sales. In the pattis issued to the Agriculaturists the name of the persons to whom jaggery is sold is specifically mentioned. The baskets of each principal are separately marked. The stock register also indicates the number of baskets of jaggery held in the name of the Commission Agents. Every buyer is fully apprised of the fact that he is purchasing the jaggery of specified agriculturist principals and not that of the Appellants. This procedure it is said has been in vogue for a long time.
(3.) Till about 1963 under S.11 of Madras General Sales Tax Act as well as under the Andhra Pradesh General Sales Tax Act 1957 (hereinafter called the "Principal Act") Commission Agents were required to obtain and were being issued licenses and if they conformed to the conditions of those licenses they were not subjected to tax. In 1963 the Principal Act was amended by Andhra Pradesh General Sales Tax Amendment Act 16 of 1963 which substituted a new Section 11 for that which was in force till then. The new Section 11 changed the pre-existing structure of assessment in that the Agents of Resident Principals were made liable for assessment and collection of Tax though the liability of the Agent was made co-extensive with that of the Principal. The Sales Tax Authorities however were making assessments of the turn-over of the Agents in respect of the purchase and sales of jaggery of several principals notwithstanding the fact that the turnover upto Rs.10,000/- of each was not exigible to tax. These assessments were challenged in a batch of writ Petitions in Irri Veera Raju v. Commercial Tax Officer, Tadepalligudem. (1967) 20 STC 501 (Andh Pra) in which the High Court of Andhra Pradesh held that the provisions of the Principal Act indicated that the Agent is a dealer in respect of each of the Principals, that he is deemed to be as many dealers as there are principals, and therefore, the total turn-over of the Agent in respect of the several principals could not be computed for assessing him when in fact the turn-over of each of the principals was below the limit i. e. Rs. 10,000/-. As a consequence of this decision the Andhra Pradesh General Sales Tax Amendment Act 5 of 1068 was enacted and a new Section 11 was substituted for the then existing section. This Section 11 was given retrospective effect from the 1st August 1963. The object of this Amendment was to enable the Taxing authorities to assess, levy and collect tax or penalty under the Sales Tax Act from the Agent irrespective of the fact that such principal is not liable to pay the tax or penalty in respect of that transaction on account of the turn-over of the principal being less than the minimum turn-over specified in sub-section (1) of Section 5. The proviso to the new Section 11 however authorised the Tax or penalty assessed or levied on or due from Agent to be recovered by the Assessing authorities from the principals instead of from the Agents, only if the principal is liable to pay tax or penalty. This new Section was also challenged on various grounds in a batch of Writ Petitions in Srikonathala Venkata Ramana and Budha Apparao v. State of Andhra Pradesh, (1969) 24 STC 367 (Andh Pra).;