- (1.) The respondents entered into a contract with the Union government for the supply of parcel vans to be assembled by them in the railway workshop at lzatnagar in Uttar Pradesh. During the year 1952-53 therespondents supplied 36 parcel vans of the total value of Rs. 3,97,272-1-0. The Sales Tax Officer, Bareilly, assessed the respondents to sales tax on the price of the parcel vans received by them holding that the respondents were carrying on the business of selling railway vans, and had in the course of their business sold the vans in question in Uttar Pradesh to the Union government, and on that account they were "dealers" within the meaning of section 2 (c) of the U. P. Sales Tax Act, 1948 (15 of 1948). In appeal the Judge (Appeals) held that the respondents were not dealers within the meaning of the Act and were not liable to be assessed to sales tax on the turnover received by sale of parcel vans. The order passed by the Judge (Appeals) was confirmed by the Judge (Revisions) Sales Tax. At the instance of the Commissioner of Sales Tax, U. P. , the Judge (Revisions) submitted the following question for opinion of the High court: "whether in the circumstances and on the facts of the case, the assessee came within the meaning of the term 'dealer' under section 2 (c) of the U. P. Sales Tax Act " The High court agreed with the Judge (Revisions) and held that the respondents were not dealers carrying on the business of selling goods in Uttar Pradesh, and on that account the turnover received by them on account of sale of parcel vans was not taxable. The Commissioner of Sales Tax has appealed to this court.
(2.) The respondents are carrying on the business of fabricating wagons and coaches. The contract with the Union government for assembling parcel vans was also entered into by them in the course of their business. Under that contract, the respondents were to assemble parcel vans in the railway workshop at Izatnagar in Uttar Pradesh. The parcel vans were assembled by the respondents at Izatnagar and delivered to the railway administration within the State of Uttar Pradesh. Section 2 (c) of the U. P. Sales Tax Act, 1948 (15 of 1948) , defines "dealer" as meaning any person or association of persons carrying on the business of buying or selling goods in Uttar Pradesh. Sale of goods by the respondents within the State of Uttar Pradesh is not denied. But the respondents deny that they ever "carried on the business of selling goods" within the State. Normally to constitute business, there must be both continuity and repetition of a trading activity. And the definition of dealer requires that the activity must be carried on within the State of Uttar Pradesh. A single contract under which goods are produced and supplied will not bring the respondents within the description of a person carrying on business of buying and selling goods in Uttar Pradesh. The respondents have not set up a business organisation within the State: the respondents' place of business is in Calcutta. They have no office or agency within the State of Uttar Pradesh : there is no repetition of sales, nor is there continuity. To be a dealer, it had to be shown that not only the respondents were selling goods in Uttar Pradesh, but they were carrying on the business of selling goods in Uttar Pradesh. The Judge (Revisions) held that a single contract under which 36 parcel vans were assembled and supplied to the railwayadministration within the State of Uttar Pradesh cannot amount to carrying on the business within the State of Uttar Pradesh. With that view the High court agreed.
(3.) Mr. Agarwala on behalf of the Commissioner of Sales Tax contended that the respondents took nearly two years to assemble the parcel vans and received from time to time price which was agreed to be paid to them. This circumstance is, however, irrelevant. The definition of "dealer" does not make a person carrying on the business of manufacturing goods within the State of Uttar Pradesh a dealer: a person is a dealer only if he carries on the business of buying or selling goods in Uttar Pradesh. Existence of a business of buying or selling goods in Uttar Pradesh not being established, the appeal must fail and is dismissed with costs.;