1. The plaintiff is the appellant. On 18th June, 1949, the State Government collected from him a sum of Rs. 1,409 which they claimed he was bound to pay as sales tax in respect of the year 1944-45. On 28th July, 1950, that is to say, more than six months after the date of payment, the plaintiff brought the action, out of which the present second appeal arises, for the recovery of this sum of Rs. 1,409 which he had been forced to pay, together with interest thereon and costs.

2. The case set out in the plaint was this. The plaintiff is only a commission merchant, his business consisting in selling goods which ryots took to him for sale and which he sold on their behalf. The plaintiff was at no time the owner of the goods; ownership always continued in the ryots till the goods were sold to the merchants or other purchasers. The plaint avers: “The plaintiff being a commission agent, has no title of his own and he simply transfers the title of his principal.” He was not therefore liable to pay tax under Section 3 of the Madras General Sales Tax Act. For his trouble he used to be paid a commission both by the ryots and by the purchasers from the ryots. In addition to this commission he also used to collect customary charges like dharmam etc.

3. The State of Madras filed a written statement in which it was pleaded that the accounts maintained by the plaintiff had been manipulated and that he was taxed “on his independent business and not on commission business. The plaintiff was the owner of the goods.”

4. The learned District Munsif found that the tax had-been levied on the plaintiff as a dealer and that he was not entitled to the exemption provided by Section 8 of the Madras General Sales Tax Act. On appeal the learned Subordinate Judge concurred in this view. He went further and also held that the claim of the plaintiff was barred by limitation. In these circumstances the plaintiff has come to this Court in second appeal.

5. Mr. Umamaheswaram, the learned Advocate for the appellant raised four points and we shall take them up one by one. His first contention was that in law the plaintiff was only a broker who brought together the ryots who had cultivated the groundnuts and the merchants or millers who finally took the groundnuts off the hands of the ryots. The Courts below misunderstood the effect of the evidence and their finding that the plaintiff was a dealer is therefore liable to be set aside.

6. We are unable to agree. At the time the plaint was filed Satya-narayana Rao and Viswanatha Sastri, JJ., had decided in Government of Madras v. Veerabhadrappa 1951 I.L.R 1951 Mad. 257, that,

“A commission agent who buys or sells on behalf of a principal is not a ‘dealer’ within the meaning of the Madras General Sales Tax Act (IX of 1939) and is not liable to taxation in respect of the purchases and sales effected by him on behalf of the principal at his instance and such transactions do not constitute his ‘turnover’.”

7. Presumably in view of that decision the plaint was drafted on the basis that the plaintiff was only a commission agent. But, by the time the suit became ripe for trial, a Full Bench of this Court had given the decision reported in Radhakrishna v. Province ‘of Madras 1952 I.L.R 1952 Mad. 571. There it was held that though a broker is only a person who is employed to make a bargain for another, and who receives a commission on the transaction and cannot be called a dealer’ yet a commission agent who has custody or possession of the goods and who has authority from the owner of the goods to pass the property in and title to them is a dealer within the meaning of the Act, and, therefore, liable to pay sales tax. In view of that decision the oral evidence in this case proceeded on the basis not that the plaintiff was a commission agent as he had pleaded in his plaint, but that he was a broker. It appears to us that the evidence was designed to suit the decision in the Full Bench case and cannot be accepted. Further the evidence of P.Ws 1 and 2 is not sufficient to establish the true nature or course of the plaintiff's business. The general statements they made are of little worth. Specifically P.W 1 spoke only of a single transaction. It is to be doubted whether his evidence even in that respect is true because when he was in the box no attempt was made to relate the transaction about which he gave evidence to any particular entry in the books of the plaintiff. We asked to be shown the relevant entry and were then shown the entry in Ex. A. 7. But, we noticed that the name given in it did not tally with that of P.W 1. The corresponding entry in the weighment book shows that the original entry had been rubbed out and a new name inserted. Like P.W 1, P.W 2 also spoke only of a single instance and even in his case no attempt was made to relate his evidence to the entries in the books of the plaintiff. In respect of this witness also we asked to be shown the entries in the books of the plaintiff. We were shown an entry, but this too did not fully tally as the name of the village is different;. We do not think it necessary to examine the evidence on this point in further detail; we are fully satisfied that the conclusion arrived at by both the courts below that the plaintiff was a commission agent and not a broker is right.

8. The second point which Mr. Umamaheswaram raised was this. The plaintiff had been given a licence under Section 8 of the Madras General Sales Tax Act for the period between 2nd February, 1945, and 31st March, 1945. In respect of this period, said Mr. Umamaheswaram, the plaintiff cannot in any way be required to pay sales tax. Here too we are not able to agree. We would first of all remark that this point has not been taken in the pleadings. Section 8 of the Madras General Sales Tax Act authorises the Provincial Government to grant a licence to any person who, for an agreed commission or brokerage buys or sells on behalf of known principals specified in the accounts in respect of each transaction. The section then goes on to empower Government to exempt from the tax payable under Section 3 “such of his transactions as are carried out in accordance with the terms and conditions of his licence.” It will be noticed that the exemption does not extend to all the transactions carried on by the individual to whom a licence has been issued. The exemption is limited to such of his transactions as are carried out in accordance with the terms of the licence. If it had been intended to rely on the licence issued to the plaintiff that ground should have been expressly taken in the plaint so that the defendant might have had an opportunity of showing that the terms and conditions of the licence had not been complied with. In Ex. B. 5, the proceedings of the Commercial Tax Officer, Bellary, dated 21st May, 1946, there is a specific finding that the appellant violated the conditions of the licence by not filing a detailed list showing the names, addresses and turnover of his various principals. He also considered that this was not a mere technical omission since,

“on account of this omission on the part of the appellant, it was impossible for the licensing authority to have the turnover of principals verified and assessed where necessary.”

9. Mr. Umamaheswaram very strongly argued that the return specified in the annexure to Form No. VI, which the licensees were required to submit, had been submitted. But, on examination we find that it does not contain the really essential particulars. Mr. Umamaheswaram argued that in such a case it was the duty of the licensing authority to ask for fuller particulars and till that had been done assessment should not have been made. No doubt the Commercial Tax Officer could have called for fuller information, but that does not absolve the plaintiff from the necessity to comply with the conditions incorporated in his licence. His claim to immunity from tax is dependent on his fulfilling the conditions of his licence and in his order the Commercial Tax Officer makes it clear that he has not fulfilled those conditions.

10. The third point Mr. Umamaheswaram raised was this. Even if it be that the plaintiff was a dealer in the sense that he sold groundnuts which his principals took to him to be sold through him, he would still be exempt from sales tax for two reasons:—

(a) The definition of “turnover” in Section 2(i) of the Act excludes from its scope

“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.”

In this case the persons or principals on whose behalf the plaintiff sold were ryots and so the transactions cannot be included in the turnover of the plaintiff.

(b) Sub-rule (2) of Rule 4 directs that in the case of groundnuts “the gross turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by him”. In other words, the tax in respect of groundnuts is payable not by the seller but by the pur chaser. In the present case the Deputy Commercial Tax Officer (D.W 2) has admitted in his evidence that the tax was paid by the purchasers.

11. The answer to this contention is that no plea of this kind was taken in the plaint and therefore the facts necessary to substantiate this contention do not exist on the record. The turnover of the plaintiff is the aggregate of a large number of transactions and we have really no idea of the nature of those transactions. It has not been shown that all or in fact even one of the persons who took their groundnuts to the plaintiff had grown the groundnuts on land in which he was interested as owner, mortgagee, tenant or otherwise. It is true that the names of the persons who are alleged to have sold to or through the plaintiff appear in his books, but what their legal relationship in the lands on which the ground-nuts were grown is, we do not know. Nor again do we know that in respect of the numerous transactions entered into by the plaintiff he did not buy the groundnuts himself. It is clear that if he himself had purchased the groundnuts from the persons who took them to him and subsequently sold them to other dealers or millers he would have been bound to pay sales tax in respect of his own purchases. No analysis has been, made of the transactions of the plaintiff with a view to ascertain whether and in what instances he acted merely as an agent and in what other instances, if any, he purchased himself. The question was not investigated naturally because it was not raised in the pleadings. The point Mr. Umamaheswaram now raised is not a pure question of law but one of mixed law and fact, and, on the short ground that the facts do not exist on which the legal contentions can be rested this point also must be decided against him.

12. The last point which Mr. Umamaheswaram raised is that the plaintiff is entitled to bring an action within three years from 18th June, 1949, the date on which the money was collected from him, and that the view taken by the learned Subordinate Judge that the action should have been brought within six months by reason of Section 18 of the Madras General Sales Tax Act is wrong. This question, however, does not now arise since on the failure of the other contentions raised by Mr. Umamaheswaram the finding must be that the plaintiff has not been illegally or wrongly taxed.

13. The second appeal fails and is dismissed with costs.

14. Appeal dismissed.