Commission agents are not dealers under sales tax law unless they trade on their own behalf.

A person acting only as an agent or broker is not treated as a dealer under the Madras General Sales Tax Act, 1939 unless he carries on buying or selling on his own behalf. The Act's definition of dealer and turnover was read as excluding a mere commission agent who only brings buyer and seller together. Explanation 2, deeming an agent of a non-resident to be a dealer, confirmed that an ordinary agent would otherwise fall outside the definition. Failure to obtain an agent's licence did not itself create dealer status or criminal liability for non-payment of sales tax.

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Issues: Whether a person acting only as an agent or broker, and not as a principal dealer, could be treated as a dealer liable to pay sales tax and be prosecuted for non-payment under the Madras General Sales Tax Act, 1939.

Analysis: The definition of "dealer" in Section 2(b) of the Madras General Sales Tax Act, 1939 was read as applying to a person who carries on the business of buying or selling goods on his own behalf. Explanation 2 to that provision indicated that an agent of a non-resident person would be deemed to be a dealer, which showed that an ordinary agent would not otherwise fall within the definition. The definition of "turnover" in Section 2(i) was also considered inconsistent with the activities of a mere broker or commission agent, whose role is only to bring buyer and seller together. Although Section 8 contemplated licensing of agents, failure to obtain a licence did not by itself convert an agent into a dealer or make him liable for prosecution unless he was otherwise within the statutory definition.

Conclusion: A mere agent or broker without a turnover of his own business is not a dealer within the Act and is not liable for prosecution for non-payment of the tax on that footing.

Ratio Decidendi: Liability under the sales tax law depends on satisfying the statutory definition of dealer and turnover, and an ordinary commission agent who does not buy or sell on his own behalf does not become a dealer merely because he has not obtained a licence.

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