Sales tax liability on khandsari sugar was confined to the manufacturer, not the commission agent, under the notification.

Khandsari sugar sold in Uttar Pradesh was made taxable by a section 3-A notification only at the point of sale by the manufacturer, overriding earlier notifications. Although turnover would ordinarily have been taxable under section 3, sales by a commission agent on behalf of the manufacturer were treated as sales by the manufacturer for the notification's purpose. Because the taxable point was confined to the manufacturer's sale, the commission agent did not fall within the class of persons liable under the notification. Liability therefore rested only on the manufacturer, not on the commission agent.

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Issues: Whether a commission agent was liable to pay sales tax on the turnover of khandsari sugar manufactured in Uttar Pradesh by his principals, in view of the notification issued under section 3-A of the U.P. Sales Tax Act, 1948.

Analysis: The turnover would ordinarily have been taxable under section 3 of the U.P. Sales Tax Act, 1948. However, the notification issued under section 3-A superseded prior notifications and provided that khandsari sugar manufactured in Uttar Pradesh would be liable to tax only at the point of sale by the manufacturer. The sales made by the commission agent on behalf of the manufacturers were therefore treated, for the purpose of the notification, as sales by the manufacturer himself. Since the taxable point was confined to the manufacturer's sale, the commission agent did not fall within the class of persons liable under the notification.

Conclusion: The commission agent was not liable to pay sales tax on the disputed turnover; liability rested only on the manufacturer.

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