Somnath Iyer, J.
1. This is a revision petition presented by the State Government against an order made by the Sales-tax Appellate Tribunal which set aside the order of assessment made by the Commercial Tax Officer which was affirmed by the Deputy Commissioner in appeal. The Commercial Tax Officer made an assessment of the turnover of the respondent-firm which was carrying on business as commission agents in the State of Mysore both directly and through its agents.
2. The contention advanced by the firm which the Tribunal accepted was that since the firm was carrying on its business through its agents, that part of the turnover which relates to the business so carried on through the agents could not be taxed as turnover in the hands of the firm, and that the agents alone were liable to pay the tax. This view was founded by the Tribunal on the first proviso to Section 11 which reads:-
'11. Every person who for an agreed commission or brokerage buys or sells on behalf of known principals specified in his accounts in respect of each transaction shall obtain a licence from the assessing authority concerned on payment of such fee not exceeding fifty rupees as may be prescribed in that behalf:
Provided that-- (i) in the case of an agent who carries on such business in the State of Mysore on behalf of the principal who is a resident of the State of Mysore, the agent shall be assessed to the tax or taxes leviable under this Act in respect of the transaction provided that the agent may voluntarily pay the tax or the taxes collected, as and when collected to the State Government pending assessment of the tax payable by him, without prejudice to his other rights to recover from his principal the tax or taxes paid by him on behalf of the principal; such agent may retain out of any moneys payable to the principal by the agent, a sum equal to the amount of the tax assessed on or paid by the agent. The principal on whose behalf the agent has paid the tax as aforesaid shall not again be taxed in respect of the same transaction but the burden of proving that the tax in respect of the transaction has been paid by the agent shall be on such principal;'
3. The Tribunal thought, that the words 'the agent shall be assessed' occurring in this proviso excluded the liability of the principal, and that therefore no assessment could be made on the principal. It is obvious that this view rests upon an incorrect interpretation of the proviso and overlooks the relevant statutory provision.
4. Now, a 'dealer' as defined by Section 2(1)(k) means a person who carries on the business of buying, selling, supplying or distributing goods 'directly, or otherwise;' and so, even a principal who carries on such business through the instrumentality of an agent is a dealer within the meaning of that clause.
5. Section 5 which is the charging section makes every dealer liable for payment of the tax on his taxable turnover, and there is nothing in the first proviso to Section 11 which supports the view that an agent is exclusively liable to pay the tax. That proviso, it is clear, incorporates an enabling provision which makes the agent also liable to pay the tax. And that, that is so, is clear from the concluding part of the proviso which says that in a case where the agent has paid the tax the principal shall not again be taxed in respect of the same transaction. If the principal, as stated by the Tribunal, was not liable in a case where the business is carried on by an agent, it was unnecessary for that part of the proviso to exempt the principal from payment of the tax only if that tax had already been paid by the agent. If there was no liability on the part of the principal, that exemption was scarcely necessary.
6. We, therefore, allow this revision petition and set aside the order made by the Sales Tax Appellate Tribunal. In consequence the order or assessment made by the Commercial Tax Officer and the order made by the Deputy Commissioner in appeal stand restored. No costs.
7. Revision allowed.