SATISH CHANDRA, J. - (1.) A Bench of this court being of the opinion that in view of the observations of the Supreme Court in State of Punjab v. Bajaj Electricals Ltd. ([1970] 25 S.T.C. 82 (S.C.)), the decision of this court in Nestles' Products (India) Limited v. Commissioner of Sales Tax ([1963] 14 S.T.C. 606) requires reconsideration, referred this reference to a larger Bench. That is how the matter had come before us.
(2.) THE Judge (Revisions) Sales Tax, U.P., Lucknow, referred the following three questions of law for the opinion of this court under section 11(1), U.P. Sales Tax Act - "(1) Whether under the circumstances of this case the applicant can be treated to be carrying on business activity within U.P. so as to be classified as the dealer for the purposes of assessment ? (2) Whether under the circumstances of this case the applicant can be treated to be an importer against whom an assessment can be passed ? (3) Whether under the circumstances of this case the Sales Tax Officer at Barabanki who had been so directed as having jurisdiction was vested with the jurisdiction to pass the assessment ?" For deciding the first question, the relevant facts are : The assessee carries on the business of buying and selling cotton yarn at Calcutta. It received orders from certain U.P. dealers, and, in execution thereof, it despatched cotton yarn to them. The railway receipts were prepared in the name of self. They were endorsed to the assessee's bankers at Calcutta. The bankers at Calcutta then realised the sale price from the purchasers within U.P. on endorsement and delivery of the receipt, through its branches in U.P. This modus operandi was accepted by the assessing authorities. But, they, including the Judge (Revisions), held that the assessee was carrying on the business of selling goods within U.P. and was a "dealer" as defined by the U.P. Sales Tax Act, and as such liable to tax. Section 2(c), U.P. Sales Tax Act, defines the word "dealer" to mean any person who carries on the business of buying or selling goods within Uttar Pradesh.
(3.) THE learned standing counsel supported the view taken by the Judge (Revisions) by the decision of this court in Nestles' Products (India) Limited v. Commissioner of Sales Tax ([1963] 14 S.T.C. 606). In my opinion, that case is, on facts, distinguishable. In that case, the assessee had its office at Calcutta. It had no office in uttar pradesh. It entered into contracts of sale of condensed milk and powered milk with customers residing in Uttar Pradesh. It sent goods by train. The railway receipts were prepared in the name of the assessee as consignor and consignee both. At the destinations, the goods were taken delivery of either by the assessee's representatives in Uttar Pradesh, who then sold them by going from door to door, or by the customers through a bank against payment. The assessee sent the railway receipts to its bankers in U.P., after endorsing them in their favour and they delivered them to the customers, after receiving payments from them and endorsing them in their favour. On these facts, it was found that in so far as the goods were delivered to the assessee's representatives in Uttar Pradesh, the sale by the representatives of the assessee by going from door to door, would be sale of goods by the assessee itself. In relative to the delivery made to customers through a bank against payment, it was held that the bankers acted as an agent of the assessee. Hence, this activity of the bankers was a part of the business activity of the assessee. This would mean that he was carrying on the business of selling in Uttar Pradesh so as to be a "dealer". In the present case, the distinguishing feature is that the assessee or its representative did not take delivery of the goods from the railway. The customers directly took delivery from the railway. The assessee or its representative did not sell the goods within Uttar Pradesh, after they had arrived in Uttar Pradesh.;