- (1.) THIS is a reference made by the Revising Authority under the U. P. Sales Tax Act.
(2.) THE assessees. Messrs. Pannalal Babulal of Kanpur, were assessed to a tax of Rs. 2,343-12-0 on a turnover of Rs. 1,50,000 for the period from 1st April to 8-6-1948. They prefeired no appeal against the assessment but filed an application in revision under Section 10 of the Act to the judge (Revisions) Sales Tax.
(3.) THE assessees are a firm of commission agents. In the ordinary course of their business they made purchases and supplied goods to their contituents and were paid commission on the goods so supplied. These supplies were treated as sales by Sales Tax Officer and assessed to tax, although the assessses contended that they were merely purchasing agents for their customers find the supply oft goods made by them to their customers was not a sale but performance of their duty as agents. It was, however, found that when the assessees made purchases for making such supplies, the persons from whom purchases were made entered in their account books the names of the assessees as the purchasers of the goods and the names of the persons for whom the goods were brought were not disclosed to those sellers. The Sales Tax Officer and the Revising Authority took the view that there was no privity of contract between the various business houses at kanpur from which the goods were purchased and the assessees' customers who were the persons who ultimately received goods through the assessees. It was, therefore, inferred by the taxing autho-" rities that two sales had taken place. The first was the sale to the assessees by the firm from whom the goods were purchased and the second was the sale effected by the assessees to their customers to whom they were supplied. The second transaction having been considered to be a sale effected by the assessees, they were held to be dealers within the meaning of the Sales Tax Act and required to pay sales tax on the amount received from their customers which was regarded as their turnover.;