Judgment:
K.S. Paripoornan, J.
1. The Revenue is the revision petitioner. The respondent is an association of cardamom growers. They conduct auction sale of cardamom produced by the members of the association. The question involved in these cases is whether the association is liable under the Kerala Surcharge on Taxes Act, 1957.
2. According to the respondents they were auctioning cardamom in a representative capacity and the liability to pay surcharge on the turnover of cardamom referable to the auction sales, ought to depend on, whether or not, surcharge would become leviable, had the assessment been, made on each grower on his turnover of the goods; In other words, according to the respondents, the total sales turnover of cardamom should not be the criteria for imposition of surcharge. The Tribunal held that the respondent was only an agent, that the members whose crop was auctioned by the respondent were the principals, that the agent could be assessed under the Kerala General Sales Tax Act only on the aggregate turnover relating to the principals who were liable to tax under Section 5 and that surcharge could likewise be levied only in respect of the turnover of those principals whose individual turnover was not less than Rs. 30,000.
3. These revision petitions relate to the assessment years 1973-74, 1974-76, 1975-76 and 1976-77. For these assessment years the Sales Tax Officer treated the respondent as a dealer under the Kerala General Sales Tax Act and assessed them to sales tax and to surcharge. The Deputy Commissioner of Agricultural Income-tax and Sales Tax, Central Zone, in exercise of powers under Section 36 of the Kerala General Sales Tax Act, set aside the assessment order and remanded the case for fresh disposal, holding that the imposition of surcharge was regular. The assessee went in appeal before the Kerala Sales Tax Appellate Tribunal, by filing T. A. Nos. 960 to 963 of 1982. They contended before the Tribunal that they are only 'agents' of the growers, whose produce is auctioned by it and that the liability to surcharge cannot be decided on the basis of the aggregate turnover in their hands. The Tribunal held that the order of the Deputy Commissioner directing the assessing authority to treat the respondent in a capacity different from that of an agent was wrong because the immediate effect of that direction would be to impose surcharge on the aggregate turnover without excluding the turnover of those members whose total turnover would be below the amount specified for charging surcharge. This conclusion of the Tribunal is under challenge.
4. We heard Sri T. Karunakaran Nambiar, learned counsel appearing for the Revenue, and Sri Ramachandran Nair, learned counsel appearing for the respondent-assessee.
5. The respondent-assessee is M/s. Cardamom Planters' Association, Bodinayakanur. It is an association of cardamom growers. They collect the produce of the growers who are members of the association and sell the entire quantity by auction or otherwise. They fall squarely within the definition of 'dealer' in Clause (viii) of Section 2 of the Kerala General Sales Tax Act. The relevant portion of the definition is :
'Dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes-
(b) * * *(c) a commission agent, a broker or a del credere agent or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods on behalf of any principal.
It is conceded by the learned counsel appearing on either side that the respondent is a dealer under the above provision.
6. 'Turnover' has been defined, in Clause (xxvii) of Section 2 of the Kerala General Sales Tax Act as :
the aggregate amount for which goods are either bought or sold, supplied or distributed by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover.
As per this definition the aggregate amount for which the cardamom was sold by the respondent will form its turnover. The respondent is being assessed on that turnover under the Kerala General Sales Tax Act. This fact is also not in dispute.
7. The above circumstances clearly establish the fact that the respondent is a dealer as defined in the Kerala General Sales Tax Act and that the aggregate amount realised on sale of cardamom is its turnover. Clause I of Section 3 of the Kerala Surcharge on Taxes Act, 1957 reads :
3. Levy of surcharge on sales and purchase taxes.-(1) The tax payable under the Kerala General Sales Tax Act, 1963, shall, in the case of a dealer whose turnover-
(a) is not less than one lakh rupees but does not exceed ten lakhs rupees in a year, be increased by a surcharge at the rate of five per centum, and
(b) exceeds ten lakhs rupees in a year, be increased by a surcharge at the rate of eight per centum, of the tax payable for that year, and the provisions of the Kerala General Sales Tax Act, 1963, shall apply in relation to the said surcharge as they apply in relation to the tax payable under the said Act.
As per the above definition the respondent is liable to pay surcharge if it satisfies the conditions mentioned therein.
8. The arguments advanced by the learned counsel appearing for the respondent is that the respondent is only an agent who acts on behalf of its principal, that the liability of an agent is co-extensive with that of the principal, that if the principal is not liable to tax the agent will not be liable thereto and that if a member of the association whose turnover is less than 30,000 rupees, is not liable to tax under Section 6 of the Kerala General Sales Tax Act, the respondent should also be exempted from tax on that turnover. This argument is advanced only with respect to the liability under the Kerala Surcharge on Taxes Act, 1957. The respondent has ho case that their turnover for the purpose of assessment under the Kerala General Sales Tax Act should be confined to those of the members of the association who are liable under the charging section (Section 6) and tax levied accordingly. When the liability to pay sales tax on the entire turnover is not in dispute, the same turnover must be accepted for fixing the liability of the respondents under the Kerala Surcharge on Taxes Act as well.
9. Relying on the decision in Murray & Company v. Government of Madras [1970] 26 STC 323 (Mad.), the learned counsel appearing for the respondent submits that the liability of the respondent is co-extensive with that of its principal and that if the principal is not liable to tax, the respondent, the agent cannot be made liable. We are not impressed with this argument. It is true that under the general law, the liability of an agent is co-extensive with that of the principal. But this rule is subject to the provisions contained in the Kerala General Sales Tax Act with which we are concerned. The statute specifically brings in an agent who carries on business on behalf of the principal within the definition of 'dealer'. 'Turnover' as defined in the Act takes in the aggregate amount for which the goods are bought or sold by a dealer. Thus the Act makes the agent a dealer, and his entire turnover is exigible to tax. Viewed in this manner the respondent is liable under the Kerala Surcharge on Taxes Act for the entire turnover. In the above circumstances, the respondents' contention that their liabilities are co-equal with that of their principals who are cardamom growers and since some of them are not liable to be taxed in respect of cardamom sold by them, under the Kerala General Sales Tax Act or Surcharge Act, the auctioneer (assessee) is not liable to' tax, has only to be rejected and we do so.
In the light of what has been stated above, we allow these revision petitions and reverse the order of the Sales Tax Appellate Tribunal. We make no order as to costs.