Dealer status under sales tax law applies when an intermediary buys goods in his own right and resells them on his own responsibility.

Clauses 2 and 4 of the distribution agreement were read together and treated as part of one commercial arrangement, not as distinct classes of transactions. Clause 4 regulated only the acceptance, countersigning, invoicing, and execution of customer orders; it did not convert the distributor into a mere guarantee-broker. On the contractual terms and actual course of business, the assessee bought goods from the company in his own right, became liable for the price, had invoices issued in his name, and resold the goods to customers. He was therefore a dealer within section 2(c) of the Madhya Pradesh Sales Tax Act, 1947, and liable to sales tax on the disputed transactions.

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Issues: (i) Whether clauses 2 and 4 of the distribution agreement related to different types of transactions. (ii) Whether the assessee was a dealer within the meaning of section 2(c) of the Madhya Pradesh Sales Tax Act, 1947, in respect of the transactions covered by clause 4.

Issue (i): Whether clauses 2 and 4 of the distribution agreement related to different types of transactions.

Analysis: The agreement had to be read as a whole. Clause 2 governed the distributor's sales to his customers, under which he bought the goods from the company and sold them on his own responsibility. Clause 4 only regulated the manner in which orders from customers were to be accepted, countersigned, invoiced, and executed. It did not create a separate class of transactions in which the distributor merely acted as a guarantee-broker.

Conclusion: Clauses 2 and 4 did not relate to different types of transactions.

Issue (ii): Whether the assessee was a dealer within the meaning of section 2(c) of the Madhya Pradesh Sales Tax Act, 1947, in respect of the transactions covered by clause 4.

Analysis: A dealer is a person who carries on the business of selling or supplying goods as principal or agent. On the terms of the agreement and the course of business, the assessee accepted orders, became liable to the company for the price, caused invoices to be made in his own name, and then sold the goods to customers. The arrangement showed a sale by the company to the distributor followed by sales by the distributor to customers. The guarantee-broker theory was inconsistent with the contractual terms and the factual findings.

Conclusion: The assessee was a dealer within section 2(c) in respect of the disputed transactions.

Final Conclusion: The reference was answered in favour of the Revenue, and the assessee was held liable to sales tax on the transactions in question.

Ratio Decidendi: Where the contractual terms and course of business show that an intermediary buys goods from the supplier in his own right and resells them to customers on his own responsibility, he is a dealer for sales tax purposes and not merely a guarantee-broker.

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