- (1.) BY an order of this Court dated the 2nd May, 1958, the Commissioner of Sales-tax Rajasthan was directed to refer a question of law under Section 15 (3) of the rajasthan Sale-tax Act (Act No. 29 of 1954) (hereinafter called 'the Act'), and it is thus that this reference comes for opinion.
(2.) M/s. Lalchand Jalamchand of Bikaner (hereinafter called 'the assessee') were assessed for the assessment year 1956-57 on a turnover determined at the figure of Rs. 96,992/9/9. It raised a tax liability in the sum of Rs. 12,114/1 against the assessee which they disputed on the ground that they had merely imported hydrogenated vegetable and edible oils which were sold by their commission agents M/s. Pirdan Prem Chand of Bikaner (hereinafter called 'the Commission agent' ). The assessee claimed to be not liable because they made no sales and for the commission agent it was contended that they stood exempted from payment of sales-tax as they had deposited the requisite fee in the sum of Rs. 500 pursuant to a notification No. F. 21 (7) SR/55 dated 14th April, 1955. The question which this Court formulated for answer is as follows: "whether Sales Tax in respect of sales amounting to Rs. 96,992 of hydrogenated vegetable edible oils belonging to the assessee effected during the year 1955 by his commission agent Messrs. Peerdan premchand, who had been granted a valid exemption certificate in form s. T. in respect of such sales under Sub-section (2) of Section 4 of the rajasthan Sales Tax Act, 1954 is leviable on the assessee on the ground that the aforesaid sales made by the commission agent can be treated as made by the assessee for purposes of assessment and few of sales tax under the Rajasthan Sales Tax Act?" The question when analysed postulates that the hydrogenated vegetable edible oils, the sale whereof was effected by the agent, belonged to the assessee. For the purposes of determining as to who is liable for the payment of sales tax we shall have to examine the relevant provisions of the Act as applicable to the circumstances of this case. Under Section 3 when the turnover of a dealer in a previous year in respect of sales and supplies of goods exceeds certain limits specified in Section 3, it makes the dealer liable to pay sales tax. There is no controversy regarding the limit in the case before us. The first point, therefore, to be determined is whether it is 'the assessee' who is the dealer or "the agent" for the sale of the hydrogenated vegetable edible oils. The term "dealer" has been defined in Section 2 (f) as it stood for the relevant year and it reads as follows: " (f) 'dealer' means any person who carries on the business of selling or supplying goods in the State whether on commission or for remuneration or otherwise and includes a Hindu undivided family, and also a society, club or any other association which sells or supplies goods to its members; explanation--Where a dealer who resides outside the State carries on the business of selling or supplying goods in the State through a manager or agent, the manager or agent shall, in respect of such business, be deemed to be a 'dealer' for the purpose of this Act. " When a person carries on business of suiting and supplying goods in the State he comes within the ambit of the term "dealer" as defined above. The explanation embraces within the compass of the term "dealer" an agent or manager as well if the dealer who resides outside the State carries on business of selling and supplying the goods in the State. In the case before us both the agent and the assessee carry on business in the State of Rajasthan. The explanation, therefore, does not directly assist us in the determination of the question. The existence of this explanation, however, clearly suggests that but for it an agent who carried on business on behalf of the nonresident principal may not have been liable to sales tax The term "dealer" as the definition goes is a person who carries on the business of selling and supplying. Now, the word "sale" means, according to the act with all its grammatical variations and cognate expressions "any transfer of properly in goods for cash or deferred payment or other valuable consideration. " when examined from another aspect the question is as to who could and did transfer the right in the commodity the sale of which is sought to be liable to sale tax. As we have noticed earlier the ownership resided in the assesses He could have directly sold it thereby transferring the property in goods or he could have allowed the transfer through his agent or servant It is not necessary that the owner must himself perform the act constituting the transfer. It would not be correct to say that the transfers of the property in goods must necessarily be performed by the owner himself When it is done by the agent or the servant of the owner it is the extended hand of the principal or the master which transfers the property in the goods to the purchaser. It is nobody's case that the assessee had transferred the ownership in the goods to the agent. What the agent did was merely the performance of the physical acts for and on behalf of the principal when he transferred the property to the purchasers.
(3.) LEARNED counsel for the assessee argued, relying on Radhakrishna Rao v. Province of Madras, AIR 1952 Mad 718 (FB), that a commission agent, according to the accepted mercantile practice, has control over or possession of the goods and has the authority from the owner of the goods to pass the property in and title to the goods When a commission agent sells goods belonging to his principal with his authority and consent and without disclosing to the buyer the name of the owner, there is certainly a transfer of property in the goods from the commission agent to the buyer, and therefore, it was the commission agent who transferred the ownership of the property in the commodity.;