Dealer definition under sales tax law did not cover an ordinary agent acting for the Textile Marketing Organization.

Liability to sales tax depended on whether the assessee was carrying on an independent business or was only acting as an ordinary agent for the Textile Marketing Organization. The court applied section 2(c) of the Orissa Sales Tax Act and treated the definition of "dealer" as wide, but not extending to an ordinary agent of a dealer residing in Orissa. On the facts found, the Organization supplied the goods, retained the sale proceeds, and paid the assessee a commission, so the assessee had no independent status in the transactions. The reference was answered in favour of the assessee, and sales tax liability was negatived.

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Issues: Whether the assessee was a "dealer" under section 2(c) of the Orissa Sales Tax Act in respect of sales of goods supplied by the Textile Marketing Organization, and whether he was liable to pay sales tax on those transactions.

Analysis: The decisive question was whether the assessee carried on his own business of selling goods or merely acted as an ordinary agent or employee of the Textile Marketing Organization. The statutory definition of "dealer" was construed in the light of the main clause and the Explanation, so that the term would cover a person carrying on his own business of selling goods, including a commission or mercantile agent, but not an ordinary agent whose activities are really those of the principal. On the facts found, the goods were supplied by the Organization at fixed prices, its cash memos were used, sale proceeds were remitted to it, stock was inspected by its supervisor, and the assessee's commission covered his expenses as well. These facts showed that the selling business was that of the Organization and not the assessee's own business.

Conclusion: The assessee was not a dealer within section 2(c) of the Orissa Sales Tax Act and was not liable to pay sales tax on the impugned sales.

Ratio Decidendi: A person is not a "dealer" under the sales tax definition merely because he sells goods for commission on behalf of a resident principal; the statutory expression applies only where the person is carrying on his own business of selling or supplying goods.

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