ORDER
G.C. Bharuka, J.
1. In this revision filed under section 23(1) of the Karnataka Sales Tax Act, 1957 (in short, 'the Act' only) the question which has fallen for our consideration is as to whether the buying commission agents for outside principals like the petitioner are liable to pay the turnover tax as provided under section 6B of the Act. The Tribunal, keeping in view the specific provision contained in this regard under section 11(1) of the Act, has held against the petitioner.
2. Section 11(1) of the Act reads as under :
'11. Agents liable to pay tax. - (1) Notwithstanding anything contained in any law for the time being in force including this Act, every person who for an agreed commission or brokerage buys or sells on behalf of any principal who is a resident of the State of Karnataka shall, subject to the provisions of sub-section (5) of section 5 or section 6B be assessed to tax or taxes under this Act at the rate or rates leviable thereunder in respect of such purchase or sale notwithstanding that such principal is not a dealer or that the turnover of sale or purchase relating to such principal is less than the minimum specified in sub-section (5) of section 5 or section 6B : Provided that the principal, shall not be assessed to tax on his turnover in respect of which, the agent is liable to tax or taxes under sub-section (1) and the burden of proving that the turnover has been effected through an agent liable to tax under the said sub-section, shall be on such principal.'
3. The above provision makes it abundantly clear that irrespective of the fact whether the principal is a dealer under the Act or not, the agent, operating on behalf of principal, who is a resident of the State of Karnataka, will be liable to pay tax under and in accordance with section 6B of the Act.
4. Sri Indra Kumar, learned counsel appearing for the petitioner submits that the words 'total turnover' even for the purpose of section 6B of the Act is to be understood in the same sense as is provided under section 5(6) of the Act read with rule 6 or the Karnataka Sales Tax Rules, 1957 (in short 'the Rules' only) and if it is so taken then the purchases made in the State by the agent cannot form part of his turnover.
5. We find that similar contentions have already been outrightly rejected by the two Division Benches of this Court in the cases of B. P. Automobiles v. States of Karnataka [1984] 55 STC 93 and Shantilal and Brothers v. State of Karnataka [1985] 59 STC 178.
6. Following the law laid down in the said two judgments, subsequently, in the case of Jain Industrial Corporation v. Commercial Tax Officer : ILR1995KAR3092 , which was rendered by one of us (G. C. Bharuka, J.), it has been held to the following effect :
'In my considered opinion, the submission advanced by Mr. Gandhi is obviously fallacious for more than one reason. As held by the two Division Bench decisions of this Court in the cases of B. P. Automobiles [1984] 55 STC 93 and Shantilal and Brothers [1985] 59 STC 178, the expression 'total turnover' as used under section 6B(1) has to be necessarily read in terms of section 2(u-2) and not on computation thereof as provided under rule 6 of the rules. Even otherwise it is well-settled that if the rules are found to be inconsistent with the provisions of the Act, the same have to yield to the latter, and the provisions contained under the Act will have an overriding effect. The 'total turnover' as defined under section 2(u-2) of the Act, as noticed above, is not dependent on any mode of computation to be provided by the rule-making authority. On a proper construction it can well be held that rule 6 of the Rules had to be engrafted in order to work out 'taxable turnover' as defined under section 2(u-1) of the Act and the total turnover as worked out therein is only a step in-aid for ultimate computation of taxable turnover. The expression 'the total turnover of a dealer, for the purpose of the Act, shall be the aggregate' as used in rule 6 can by no rule of construction be held as intending to override the definition of 'total turnover' as defined under the Act. The rule of harmonious construction clearly suggests that the determination of total turnover under rule 6 is meant only for the purpose of determining taxable turnover and nothing more.'
7. From the above, it is clear that the expression 'total turnover' as used in section 6 of the Act, no doubt, will have the same meaning as under section 2(u-2) of the Act but for determining the same for the purpose of section 6B the deduction provided under rule 6 cannot be present be pressed into service. This aspect has been made more clear in the penultimate para of the judgment in the Jain Industrial Corporation's case [1996] 101 STC 302 (Kar) :
'It has further to be borne in mind that the grant of exemption from tax under any other provisions of the Act cannot in any way affect the liability under section 6B of the Act since in sub-section (1) thereof the Legislature has excluded the consideration of such exemptions by specifically declaring 'whether or not the whole or any portion of such turnover is liable to tax under any other provisions of this Act'. It has been made more explicit by further declaring under the second proviso to sub-section (1) of section 6B of the Act to the effect that 'no other deduction shall be made from the total turnover of a dealer for the purpose of this section'. This means that except the deductions provided under the first proviso to section 6B(1) nothing else can be deducted from the total turnover as defined under section 2(u-2) for the purpose of levy of turnover tax under section 6B of the Act.'
8. For the said reasons, we do not find any occasion to interfere with the impugned order passed by the Tribunal. Accordingly, the petition is dismissed.
9. Petition dismissed.