Broker without possession or sale role is not a dealer and is not liable to sales tax on commission.

A broker who merely brings buyer and seller together, keeps accounts only of commission, and neither takes possession of the goods nor effects the sale is not a dealer under the Madras Sales Tax Act. On those facts, the court held that tea transactions carried out directly between estates and purchasers did not make the commission agent liable to sales tax on brokerage income. The revision was allowed, and the conviction, sentence, fine, and tax demand were set aside.

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Issues: Whether the petitioner, who acted only as a broker in tea transactions and received commission, fell within the definition of a dealer under the Madras Sales Tax Act and was liable to sales tax on such commission.

Analysis: The petitioner merely brought the buyer and seller together, kept accounts only of the commission received, and did not keep account of orders booked or take possession of the goods. The goods did not pass into his possession, and the transactions were effected directly between the estates and the purchasers. In such circumstances, a person acting only as a broker or commission agent does not himself buy or sell the goods and is not treated as a dealer for sales tax purposes.

Conclusion: The petitioner was not a dealer within the meaning of the Madras Sales Tax Act and was not liable to sales tax on the commission received. The revision was allowed, and the conviction, sentence, fine, and tax demand were set aside.

Ratio Decidendi: A broker who merely brings the buyer and seller together, without buying or selling the goods or taking possession of them, is not a dealer and is not liable to sales tax on brokerage commission.

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