Broker not dealer: intermediary who only facilitates sale and lacks control over goods is outside dealer liability.

An intermediary who merely brings a seller and purchaser together, negotiates price, and remits the proceeds after the bargain is concluded is treated as a broker, not a dealer or commission agent under a definition limited to persons carrying on business as principal or agent. The contract of sale was found to arise directly between the weaver and the purchaser, with the intermediary only facilitating the transaction. As the intermediary never obtained possession or dominion over the goods before completion of sale, billing in his shop name and incidental collection or remittance of money did not create tax liability as a dealer.

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Issues: (i) whether the assessee acted as a broker or as a commission agent/dealer within the statutory definition; (ii) whether the contract of sale was between the weaver and the Bepari with the assessee only as an intermediary; and (iii) whether the assessee acquired possession or control over the goods at any stage so as to attract tax liability.

Issue (i): whether the assessee acted as a broker or as a commission agent/dealer within the statutory definition.

Analysis: The definition of dealer covered a person carrying on the business of selling or supplying goods as principal or agent. On the admitted facts, the assessee merely brought together the weaver and the Bepari, negotiated the price, and recovered the amount after the bargain was concluded. He did not himself carry on the business of selling the goods on his own behalf or as an agent with control over the goods. The distinction between a broker and a commission agent was treated as material: a broker facilitates the bargain, while a commission agent sells goods with control over them.

Conclusion: The assessee was a broker and not a dealer or commission agent within the meaning of the relevant definition.

Issue (ii): whether the contract of sale was between the weaver and the Bepari with the assessee only as an intermediary.

Analysis: The transaction was examined as a whole. The weaver displayed the sarees, the price was settled between the weaver and the Bepari through the assessee's assistance, and the sale was completed when the chit was placed in the saree. The weaver remained present throughout the negotiations and the bargain was not shown to be one entered into by the assessee as purchaser and reseller. The contractual relationship, therefore, arose directly between the weaver and the Bepari, with the assessee acting only as the intermediary who brought the parties together and settled the price.

Conclusion: The contract was between the weaver and the Bepari, and the assessee functioned only as an intermediary.

Issue (iii): whether the assessee acquired possession or control over the goods at any stage so as to attract tax liability.

Analysis: The facts showed that if the seller did not agree to the price, the weaver could take the saree away to another shop; this indicated that the goods continued to belong to the weaver until the bargain was closed. The assessee had no dominion over the goods before completion of the transaction, and the mere fact that bills were made in his shop name did not convert the transaction into one of sale by him. Collection and remittance of money after the bargain and incidental charges for packing or freight were treated as part of the brokerage arrangement and not as proof of ownership or control.

Conclusion: The assessee did not acquire possession or control over the goods at any stage before completion of the sale.

Final Conclusion: The reference was answered by holding that the assessee was not liable to be treated as a dealer on these facts, and the transactional structure amounted to brokerage rather than sales by the assessee.

Ratio Decidendi: Where an intermediary merely brings the seller and purchaser together, settles the price, and does not acquire dominion or control over the goods, he is a broker and not a dealer within a definition confined to persons carrying on the business of selling or supplying goods as principal or agent.

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