GULATI, J. - (1.) UNDER section 11(1) of the U.P. Sales Tax Act (herein-after referred to as the Act), the Additional Revising Authority, Sales Tax, Varanasi, has submitted this reference for the opinion of this court on the following question of law : "Whether on the facts and in the circumstances of the case, the assessee acting as commission agent was liable to pay sales tax in the years 1960-61 and 1961-62 on the turnover of khandsari sugar manufactured by his principals ?"
(2.) THE statement of the case is a consolidated one relating to two assessment years, viz., 1960-61 and 1961-62 and the question of law set out above is common to both the assessment years. M/s. Suraj Prasad Gauri Shanker of Varanasi (hereinafter referred to as the "assessee") carries on the business of commission agency and is also a dealer in oil-seeds and kirana. In respect of the assessment years in question a dispute arose between him and the Sales Tax Officer as to the former's liability to pay sales tax on the turnover of Khandsari sugar sold by him as commission agent on behalf of his principals, who manufacture khandsari sugar in Uttar Pradesh. The assessee's contention was that under Notification No. S.T. 1365/X-990-1956, dated 1st April, 1960, the turnover of khandsari sugar manufactured inside the State was liable to tax, as from 1st April, 1960, only at the point of sale by the manufacturer, and that he, not being a manufacturer, was not liable to pay any sales tax. This contention of the assessee was not accepted by the Sales Tax Officer and has also been rejected both by the Judge (Appeals) and the Judge (Revisions) before whom he went in appeal and revision respectively. The Revising Authority, as stated above, has at the instance of the assessee submitted this reference to this court. The notification of 1st April, 1960, referred to above so far as it is material for our purpose reads thus : "In exercise of the powers conferred by section 3-A of the U.P. Sales Tax Act, 1948 (U.P. Act No. 15 of 1948), as amended from time to time, the Governor of Uttar Pradesh is pleased to - supersede, with effect from April 1, 1960, all the previous notifications so far as they relate to the goods mentioned in column 2 of the Schedule hereto and the rates of sales tax given in such notifications, and declare that, with effect from April 1, 1960, the turnover in respect of the goods mentioned in column 2 of the Schedule hereto shall be liable to tax only at the point of sale specified in column 47 thereof and under the circumstances specified in column 3 thereof.
(3.) THE Governor is further pleased to declare that as from April 1, 1960, the rate of tax in respect of the turnover of individual goods mentioned in the aforesaid column 2 shall be as mentioned against each goods in column 5 of the Schedule hereto : ---------------------------------------------------------------------- Sl. Name of goods. Circumstances Point of Rate of No. under which to sale. tax. be taxed. ---------------------------------------------------------------------- 1. 2. 3. 4. 5. ---------------------------------------------------------------------- * * * * * 40. Khandsari sugar on (a) If imported (a) Sale by 2 paise which additional from outside importer. per excise duty is not Uttar Pradesh. rupee. leviable under the (b) If manufac- (b) Sale by Additional Duties of tured in Uttar manufacturer. Excise (Goods Special Pradesh. do." Importance) Act, 1957, or if leviable, it has specifically been exempted from such levy. ---------------------------------------------------------------------- It appears to be the common case of the parties that khandsari sugar sold by the assessee was not liable to additional excise duty and its turnover was, therefore, liable to sales tax in accordance with that notification. Admittedly, the assessee is not the manufacturer of Khandsari sugar sold by him during the two years involved in this reference. He is merely a commission agent and has sold the khandsari sugar on behalf of certain manufacturers. The notification which limits the levy of tax in respect of khandsari sugar manufactured inside the State only to the point of sale by the manufacturer, would not apply in terms to the assessee. But he has been held liable by all the sales tax authorities. The question arises as to whether he is liable under any other provision of the Act. Section 3 is the charging section of the Act. Under that section every dealer has to pay for each assessment year, tax at the rate specified therein on his turnover of the said year. A dealer has been defined by section 2(c) to mean : "Any person or association of persons carrying on the business of buying or selling goods in Uttar Pradesh, whether for commission, remuneration or otherwise." According to the explanation appended to that provision : "a factor, a broker, a commission agent or arhati ......... who carries on the business of buying and selling goods on behalf of his principals or through whom the goods are sold or purchased, shall be deemed to be a dealer for the purposes of this Act." Section 2(i) defines "turnover" in the following terms : "turnover means the aggregate amount for which goods ......... are sold ......... either directly or through another on his account or on account of others .........";