Liability of the registered person for the acts of his agent

Liability of the registered person for the acts of his agent

Section 68 of the Sales Tax Act, 1990, delves into the legal framework surrounding the liability of a registered person for the actions undertaken by their appointed agent.

The provision, updated up to June 30, 2021, through the Finance Act, 2021, establishes that when a registered person explicitly or implicitly authorizes another individual to act as their agent for any or all purposes outlined in the Act, the registered person assumes responsibility for the actions carried out by their appointed agent. This section aims to clarify the legal obligations and accountabilities within the registered-person-agent relationship, ensuring transparency and accountability within the taxation system.

The specific text of Section 68 is outlined as follows:

68. Liability of the registered person for the acts of his agent.– When any person is expressly or impliedly authorised by a registered person to be his agent for all or any of the purposes of this Act, the registered person shall be responsible for the act done by his agent.

Key components and implications of Section 68 include:

1. Express or Implied Authorization: The section acknowledges that authorization for acting on behalf of a registered person can be either expressly stated or implied. This flexibility recognizes that agreements between registered persons and their agents may take various forms, either through explicit contractual arrangements or inferred through conduct.

2. Responsibility for Agent’s Actions: Section 68 unequivocally establishes the principle that the registered person is responsible for the actions performed by their appointed agent. This liability encompasses all or any of the purposes outlined in the Sales Tax Act, 1990. The registered person cannot evade responsibility for their agent’s acts, reinforcing the idea of accountability in tax matters.

3. Clarity in Agent-Principal Relationships: By explicitly defining the liability structure, Section 68 aims to bring transparency and clarity to the relationships between registered persons and their agents within the context of the Sales Tax Act, 1990. This is crucial for maintaining the integrity of the taxation system and ensuring compliance with relevant regulations.

4. Disclaimer: The provision concludes with a disclaimer emphasizing that the text provided is for informational purposes. While efforts are made to present the correct version of the text, any errors or omissions are not the responsibility of the source providing the information.

The inclusion of Section 68 in the Sales Tax Act, 1990, is instrumental in establishing legal parameters governing the relationships between registered persons and their agents. It aligns with principles of fairness, accountability, and transparency, fostering a robust tax administration system.

Businesses, tax practitioners, and other stakeholders are encouraged to familiarize themselves with Section 68 to ensure compliance with the stipulated regulations and to gain a comprehensive understanding of the responsibilities inherent in the registered-person-agent dynamic under the Sales Tax Act, 1990.