M.C.Desai, C.J. - (1.) This is a reference made by the Judge (Revisions), Sales Tax, under Section 11(1) of the U.P. Sales Tax Act, at the instance of the assessees, inviting this Court's answers to the following questions : (1) Whether the assessees are dealers within the meaning of the explanation to the definition of 'dealer' as given in Section 2(c) of the U.P. Sales Tax Act ? (2) Whether the explanation is ultra vires of the Legislature ? (3) Whether the assessees are not agents of ex-U.P. principals ? (4) Whether the sales were inter-State sales under Article 286 of the Constitution of India ? (5) Whether Tulai charges formed part of the selling price ?
(2.) The connected reference is at the instance of another assessee and the questions raised are the same. In both cases we are concerned with the assessment year 1951-52. The assessees have been assessed to sales tax on proceeds of sales of two kinds, (1) sales of own goods as dealers and (2) sales of goods belonging to other persons residing outside Uttar Pradesh, i.e., non-resident dealers, as their commission agents. The liabilities 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 Pradesh. 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 Provinces on behalf of such person shall, in respect of such business, be deemed to be a dealer for the purposes of this Act.
(3.) The question raised before us is to be answered with reference to this definition. Apparently the assessees come within this definition of dealer as they are persons carrying on the business of selling and supplying goods in Uttar Pradesh, even though for commission or remuneration, but it was contended by Sri Raja Ram Agarwal on behalf of the assessees that the definition refers to a person selling own goods, even though for commission or remuneration, and not to a person selling goods belonging to another person as his commission agent. He pleaded that there are three manners in which a person can sell goods not manufactured or produced by him: (1)he buys them and sells them at any price he likes as an ordinary shop-keeper, (2) he buys them and sells them at the cost price and charges the buyer only a commission, and (3) he does not buy them but obtains them from their owner, sells them as an agent and either remits to them the sale price and charges the buyer a commission for own appropriation or deducts his commission from the sale price for own appropriation and remits the balance to them, and that a person selling goods in the first or second manner is covered by the definition and not a person who sells goods in the third manner. There is no difficulty about a person who sells goods in the first manner; he is undisputedly a dealer. There is also no doubt that a person who buys goods from an owner and becomes their owner and then sells them at the price he had bought them plus commission, is a dealer, but the question is whether the words "whether for commission" mean only such commission. As regards the third manner, it was contended that, since a commission agent is not the owner of the goods, he cannot be said to be selling them, that when he sells them it is really the owner who is selling them through him and that, since he sells them for a price and appropriates his commission worked out at a certain percentage of the price and remits the balance to his principal or charges the buyer commission for own appropriation in addition to the price which is remitted to the owner, he cannot be said to be selling "for commission". The words "whether for commission, remuneration or otherwise" are wide enough to include everything and are 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.;