JUDGMENT M. P. CHANDRAKANTARAJ URS, J. - This sales tax revision petition under section 23(1) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act") is by the Karnataka Food and Civil Supplies Corporation Ltd., a company incorporated under the Companies Act. Among other things, admittedly, the petitioner-company acts as procuring agent under various foodgrains levy orders of the State and Central Governments. It procures the foodgrains from the grower or the miller or huller, the points at which levy foodgrains are procured. Admittedly the company has a method by which it adds certain charges to constitute its selling price to which we have referred to in an earlier petition, namely, S.T.R.P. No. 48 of 1987 since disposed of on 13th September, 1990 [Reported as Karnataka Food & Civil Supplies Corporation Ltd. v. State of Karnataka [1991] 81 STC 87]. Its turnovers, both sales and purchases, are subject to tax. For the assessment year 1975-76 it returned turnover of Rs. 27,56,74,335.68. After claiming certain exemptions the taxable turnover returned was Rs. 6,97,13,311.88. The assessing authority, namely, the Assistant Commissioner of Commercial Taxes, Headquarters, Bangalore, for the relevant assessment year refused to accept sales in favour of the Joint Director of Food and Civil Supplies, Government of Karnataka, resulting in a turnover of Rs. 19,69,21,418.55, inter alia, on the ground that the plea of the representative of the company that the sale was covered by entry 41 of the Fifth Schedule was rejected as the petitioner-company was not a co-operative society. On that account, a proposition notice was issued in form 31A under the Karnataka Sales Tax Rules, 1957, calling upon the Corporation to show cause why it should not be brought to tax. It must be pointed out by us at this stage that the assessing authority had recorded a finding after due verification, on the said turnover of Rs. 19,69,21,418.55, no sales tax as such had been collected by the assessee, petitioner-company. It must be pointed out by us at this stage that the assessing authority had recorded a finding after due verification, on the said turnover of Rs. 19,69,21,418.55, no sales tax as such had been collected by the assessee, petitioner-company. Cause was shown by the assessee-company placing reliance on the circular issued by the Government of Karnataka by the Commissioner of Commercial Taxes that any transfer of foodgrains from wholesaler to retailer or to distributor of foodgrains would not amount to sale as the point at which the foodgrains would be subjected to sales tax would be the retail outlet and transfers to the wholesaler or retailer or distributor on the instructions of the Government would not attract tax as the price to the consumer would be at the lowest level. That also came to be rejected by the assessing authority, inter alia, on the ground that it had no application to the assessee-company as it was not a distributing agent, the wholesaler or retailer for sale of foodgrains appointed by the Government. Being aggrieved by bringing to tax the sale turnover at 1 1/2 per cent, an appeal was preferred to the Deputy Commissioner of Commercial Taxes. Appeal having been dismissed and a further appeal preferred to the Karnataka Appellate Tribunal was also dismissed in Appeal STA. No. 322 of 1984 disposed of on 11th May, 1987. Therefore, the present revision petition. 2. The facts themselves are not in dispute. Mr. Nagananda, learned counsel appearing for the Corporation submitted that the company was acting only on the instructions of the State Government and supplied the Joint Director with levy foodgrains and, therefore, it only acted as agent and therefore, there was no sale. 3. We find it very difficult to accept that proposition despite the reliance placed on the decision of this Court in the case of State of Mysore v. G. V. Deshanur [1975] 36 STC 26. The question that fell for consideration in the said decision was whether the society acting as the agent of the State Government in the matter of purchases and sales of foodgrains was liable to tax under section 5(1) of the Act. The question that fell for consideration in the said decision was whether the society acting as the agent of the State Government in the matter of purchases and sales of foodgrains was liable to tax under section 5(1) of the Act. It was held therein that if the State Government was not a dealer under the Act and the distribution of foodgrains was also not done by any undertaking of the State Government, the State Government was not liable to tax under section 5(1) of the Act and as the liability of the agent was co-extensive with that of the principal, the assessee also was not liable to tax. In order words, when any person acts as a seller, as an agent of a principal who is not liable to pay tax then the agent is also exempted from payment of tax. That at the relevant time when the case was decided, the State Government was not included in the definition of "dealer" under the Act. But section 19 of the Act provided that the State Government was liable to collect tax in respect of sales or purchases made by it like any other dealer. Therefore, when the State itself indulged in sale or purchase then it had the authority to collect the tax if the tax was leviable. 4. Under section 5(1) of the Act, we should not lose the sight of the fact that the turnover of purchase and sale of all dealers is brought within the tax net. If the State Government was not a dealer it could not be hit by section 5 of the Act. 5. The undisputed facts in this case are different. The company is a company incorporated under the Companies Act and by agreement with the State Government it is appointed to procure, store and distribute the foodgrains under levy orders as earlier stated by us. It procures foodgrains directly at the procurement point on payment of the price fixed by the Government known as the levy price. Therefore, the title in the foodgrains so procured vests in the company and it is thereafter transferred to others for a consideration. Even in the case of any transfer on instructions in favour of the Joint Director of Food and Civil Supplies, Government of Karnataka, it is for a consideration resulting in a total turnover of Rs. 19,69,21,418.55. Therefore, the title in the foodgrains so procured vests in the company and it is thereafter transferred to others for a consideration. Even in the case of any transfer on instructions in favour of the Joint Director of Food and Civil Supplies, Government of Karnataka, it is for a consideration resulting in a total turnover of Rs. 19,69,21,418.55. Therefore, it was not a mere act of distribution but actual sale but under the impression that such sale was not exigible to tax in view of entry 41 in the Fifth Schedule. Even otherwise, the second proviso to sub-section (4) of section 5 of the Act makes it imperative that the procuring agent when he sells for the first time after procurement is liable to collect sales tax on such a sale. To understand the above, it would be useful to set out sub-section (4) of section 5 of the Act together with the second proviso. "(4) Notwithstanding anything contained in sub-section (1) a tax under this Act shall be levied in respect of the sale or purchase of any of the declared goods mentioned in column (2) of the Fourth Schedule at the rate and only at the point specified in the corresponding entire of columns (3) and (4) of the said Schedule on the dealer liable to tax under this Act on his taxable turnover of sales or purchases in each year relating to such goods. ...................... Provided further that in respect of the sale of cereals mentioned in serial number 9 of the Fourth Schedule, made by any person to a procurement agent appointed by the Government of Karnataka or to any sub-agent of such procurement agent in pursuance of the Karnataka Rice Procurement (Levy) Order, 1981 or any other Foodgrains Procurement (Levy) Order of the Government of Karnataka for the time being in force, such sale shall not be deemed to be, but the subsequent sale by the said procurement agent or sub-agent shall be and shall be deemed to be the point at which the tax under this Act shall be levied." While the main body of the section is a charging section, the second proviso extracted above creates an exception in respect of sales made by the grower or the other person or persons at the point of levy from being exigible to tax. But, nevertheless, further acts as charging section to render the sale by the procuring agent immediately after procurement liable to sales tax. Therefore, on the undisputed facts of this case the sale in favour of the Joint Director of Food and Civil Suppliers was sale of commodity belonging to the assessees-company in favour of the Government for a consideration and having been procured by the company as the agent it was liable to collect sales tax on such sale in terms of the second proviso to sub-section (4) of section 5 of the Act. Undisputedly the tax was not collected on an erroneous impression whether founded on entry 41 of the Fifth Schedule or the circular, to which we have referred issued by the Commissioner, it cannot be exempted. If exempted, it should be available only if the Government had exercised its power under section 8A of the Act to create such an exemption. In the absence of such exemption being created it was the duty of the assessee-company to collect tax. Having failed to collect tax, it must make good the amount of tax as assessed. 6. We, therefore, do not find any infirmity in the impugned order and dismiss the revision petition recording an answer against the assessee in respect of the question raised in this revision petition. 7. In the circumstances of the case, there will be no order as to costs. Petition dismissed.