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TMI Blog1962 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... and (2) sales of goods belonging to other persons residing outside Uttar Pradesh, i.e., non-resident dealers, as their commission agents. The liabilites of the assessees to the sales tax on the turnover of sales of the first kind are not in dispute. What is disputed is their liability to pay sales tax on the turnover of the sales effected as commission agents. They obtain these goods from ex-U.P. dealers and sell them on commission in Uttar Predesh. They remit the sale price of the goods to the ex-U.P. dealers and charge their commission on it from the buyers in Uttar Pradesh. They also charge weighing dues from the buyers and appropriate them to themselves. The main question raised is whether they are dealers with regard to these sales. The definition of "dealer" in the Sales Tax Act at the time of its enactment in 1948 was: "any person............carrying on the business of buying or selling and supplying goods in the United Provinces whether for commission, remuneration or otherwise" and there was an explanation to the effect: "The agent of a person resident outside the United Provinces who carries on the business of buying or selling or supplying goods in the United Provin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used by way of abundant caution. All that is required for a person to come within the definition is that he must carry on the business of selling and supplying goods in Uttar Pradesh. If he is carrying on this business he is a dealer regardless of conditions or terms on which he does the business; the words "for commission, remuneration or otherwise" are simply meant to prevent an objection that a person, though carrying on business of selling and supplying goods in Uttar Pradesh, is not a dealer because of certain conditions or terms. The words far from excluding any person from the definition are intended to prevent any person from being excluded. If the assessees are found to be carrying on the business of selling and supplying goods in Uttar Pradesh they are dealers. The contention that what is intended by the Legislature is that the person must sell his own goods merits serious consideration. That the definition includes a person selling goods for commission does not necessarily indicate that it includes an agent or is not intended to apply exclusively to an owner, if an owner, as stated above, also can sell his goods for commission. If he sells goods in the second manner me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh and reside in another State; a person must carry on business in Uttar Pradesh in order that he becomes a dealer and it is not further necessary that he should reside in Uttar Pradesh. Similarly the definition does not take into consideration how the business is carried on, whether by own labour or through an agent or servant. A business can be carried on in either way and if a person carries on business either through own labour or through an agent or servant in Uttar Pradesh, he is a dealer. He becomes a dealer even though he not only resides outside Uttar Pradesh but also does not act for the carrying on of the business. He is a dealer even though he himself does not sell goods. It is to be noted that he becomes a dealer and not the agent or servant who does all the acts required for the carrying on of the business. Even though sales are effected by the agent or servant he does not become a dealer. This would be the position under the definition. But it is subject to the explanation reproduced above. The words "be deemed to be a dealer" support the conclusion that when an agent carries on a business on behalf of his principal the latter is a dealer according to the defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islature clearly intends only one person to be a dealer in respect of one business. When there is only one business carried on by an agent on behalf of its nonresident owner he is to be deemed to be a dealer, i.e., the owner is not to be deemed to be a dealer. It seems that the Legislature found it more convenient to deal with a local person than with a non-resident person and, therefore, enacted the explanation. It could not have intended to tax both the principal and the agent because there was no justification for its taxing in addition to the agent the principal only if he was nonresident. If a person residing in Uttar Pradesh carries on business through an agent, he remains a dealer notwithstanding the explanation and the agent would not be a dealer at all; so only he would be liable to be taxed. There was no reason for the Legislature's desiring to tax the agent and also the principal if he is non-resident and, therefore, the explanation meant that the agent was to be a dealer in substitution of the principal. It is not understood why in the explanation the words "for the purposes of this Act" have been added because all definitions are only "for the purposes of this Act"; se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessed on the same sales. The section makes it clear that a person who sells another's goods as an agent is a dealer liable to be taxed under section 3 and that it is wrong to say that a person is not a dealer unless he sells own goods. Second proviso to the section lends further support to this view; when an agent buys goods from his principal and instead of selling them at the same price and charging commission sells them at a different price, he is to be treated as a dealer and is not to be exempted. The Legislature has distinguished from a dealer, who as an agent sells goods for an agreed commission, a dealer who as an agent sells own goods at his own price; the latter is not to be exempted whereas the former may be. A business may be carried on for commission, remuneration or profits. A manufacturer or producer of goods carries on business for profits. An agent, such as the one exempted under section 6, carries on business for commission. An agent who buys goods and sells them at a price different from the price at which he purchased them, carries on the business for profits. "Turnover" is defined to mean the aggregate of proceeds of sale by a dealer. If a dealer transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em, that they are for services rendered by them as weighman and not for the goods, that they are realised aforesaid according to the custom of the market without there being any specific agreement in respect of their payment between them and the buyers and that they are not a part of the sale proceeds but in addition to them. The price of the goods is remitted to the principals by the assessees but the weighing dues are retained by them and, therefore, it was contended that they are not proceeds of sale. I do not agree with these contentions. We have to bear in mind that the assessees are dealers and that they have sold goods, even if belonging to their principals, to the buyers and have realized from them not only the price but also the dues. They are dealers and have received the dues from the buyers on account of sale of the goods. The right to the dues accrues from the sale of the goods. In other words, the dues proceed from the sale of the goods and are, therefore, part of the proceeds of sale. The question whether they are proceeds of sale or not is to be ascertained with reference to the moment at which they are received and what they do subsequently to them is of no consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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