Clandestine sales of jaggery were treated as taxable turnover, and illegal conduct did not prevent dealer liability.

Sales of jaggery through a society at prices above the controlled price, even when concealed in regular and secret accounts, were treated as taxable turnover because the underlying activity remained business and the society answered the description of a dealer under the sales tax law. The Court also held that jaggery did not fall within the exclusion for agricultural produce, so the turnover was not exempt on that ground. Once the society was treated as the seller carrying on business, the admitted facts established breach of the licence conditions under the sales tax regime.

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Issues: (i) whether sales of jaggery effected through the society at prices above the controlled price, though concealed in regular accounts, formed taxable turnover and made the society a dealer liable to sales tax; (ii) whether jaggery was agricultural produce excluded from turnover; (iii) whether the society violated the conditions of its licence under the sales tax law.

Issue (i): Whether sales of jaggery effected through the society at prices above the controlled price, though concealed in regular accounts, formed taxable turnover and made the society a dealer liable to sales tax.

Analysis: The society carried on the sale of members' jaggery in open auction through its own machinery and realised the full sale price, while maintaining regular and secret accounts to suppress the excess amounts. The legality of the underlying conduct did not alter the character of the activity as business. A commission agent selling goods on behalf of members, and earning commission on the sales, answers the description of a dealer under the Act. The Court also rejected the attempt to rely on earlier observations suggesting illegality would defeat tax liability, holding that income from an enterprise cannot escape tax merely because the activity was unlawful.

Conclusion: The society was a dealer, the transactions were sales, and the excess realised formed taxable turnover; the finding was against the assessee.

Issue (ii): Whether jaggery was agricultural produce excluded from turnover.

Analysis: The Court treated the question as concluded by prior authority holding that sale of jaggery does not fall within the exclusion for agricultural produce under the turnover definition. On the facts found, the commodity sold was not exempt on that footing.

Conclusion: Jaggery was not excluded as agricultural produce; the finding was against the assessee.

Issue (iii): Whether the society violated the conditions of its licence under the sales tax law.

Analysis: The contention that there was no breach of licence conditions depended on the rejected premises that the society was not the seller, that the transactions were not sales, and that it was not carrying on business. Once those premises failed, the admitted facts showed contravention of the licence conditions as recorded by the Tribunal.

Conclusion: The licence conditions were violated; the finding was against the assessee.

Final Conclusion: The revision cases failed on all substantive grounds, and the tax assessments on the disputed turnovers were upheld.

Ratio Decidendi: For sales tax purposes, an illegal or clandestine mode of carrying on a business does not prevent the activity from being treated as business, nor does it prevent the seller from being assessed on the real turnover actually realised.

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