Dealer definition under sales tax law covers a kutcha arhatiya who effectively buys and sells goods through agency.

A kutcha arhatiya was treated as a dealer under section 2(c) of the U.P. Sales Tax Act, 1948 because the statutory explanation expressly covered factors, brokers, commission agents, arhatiyas and similar mercantile agents, and the assessee in substance received goods, arranged sales, paid cultivators and realised sale proceeds. The High Court's contrary view was wrong. A reference under section 11(4) was confined to questions arising from the revisional order, so the High Court could not examine the validity of a best judgment assessment under section 7(3) when that issue had not been raised or decided in revision. The revisional order for fresh assessment was restored.

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Issues: (i) Whether a kutcha arhatiya carrying on the described business was a dealer within section 2(c) of the U.P. Sales Tax Act, 1948. (ii) Whether the High Court could examine the validity of a best judgment assessment under section 7(3) of the U.P. Sales Tax Act, 1948 when that question had not been referred or did not arise from the revisional order.

Issue (i): Whether a kutcha arhatiya carrying on the described business was a dealer within section 2(c) of the U.P. Sales Tax Act, 1948.

Analysis: The definition of dealer in section 2(c) was construed broadly. The explanation expressly brought within its scope a factor, broker, commission agent, arhatiya, del credere agent, auctioneer, or any other mercantile agent through whom goods are sold or purchased. On the admitted facts, the assessee did not merely introduce buyers and sellers but received goods, arranged their sale, paid cultivators, and realised the sale price from purchasers, showing that it carried on the business of buying and selling goods through the agency described in the statute.

Conclusion: The assessee was a dealer under section 2(c) and the contrary view of the High Court was wrong.

Issue (ii): Whether the High Court could examine the validity of a best judgment assessment under section 7(3) of the U.P. Sales Tax Act, 1948 when that question had not been referred or did not arise from the revisional order.

Analysis: A reference under section 11(4) was confined to questions arising out of the revisional order. The best judgment issue had neither been raised before nor decided by the revisional authority as a referred question, and the High Court could not enlarge the reference or reappraise the evidence to substitute its own view on the factual sufficiency of the account books.

Conclusion: The High Court was not justified in going into the best judgment assessment issue under section 7(3).

Final Conclusion: The assessee was held liable as a dealer, and the revisional order directing a fresh best judgment assessment was restored because the High Court exceeded the permissible scope of reference.

Ratio Decidendi: In a sales tax reference, an agent who in substance buys and sells goods or brings them within the statutory explanation to the definition of dealer is taxable as a dealer, and the High Court cannot decide issues outside the questions arising from the revisional order.

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