Commission agent not treated as dealer where face-to-face sales remained brokerage and goods never passed into his control.

A commission agent is treated as a "dealer" under the U.P. Sales Tax Act only if, for the relevant period, he carried on the business of buying or selling goods on behalf of principals and had actual or constructive custody of the goods with authority to sell in his own name. The later amendment extending the definition to goods sold "through" such a person did not apply. On the facts, the sellers brought the goods themselves, remained present, and the sales were completed face to face at prices approved by them; purchase slips alone did not convert brokerage into dealer activity. The transactions were therefore brokerage arrangements, not taxable sales by the agent.

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Issues: Whether a commission agent who brings cultivators and purchasers together in their presence, with the sale completed face to face and price settled with the sellers' approval, can be treated as a "dealer" under the U.P. Sales Tax Act for the purpose of sales tax liability.

Analysis: The definition of "dealer" under section 2(c) of the Act, as it then stood, covered a broker or commission agent only if he carried on the business of buying or selling goods on behalf of his principals. The later amendment adding the words "or through whom the goods are sold" was not applicable to the relevant period. The decisive enquiry was therefore whether the assessee had custody or possession of the goods, actual or constructive, and authority to sell them in its own name. The mere fact that purchase slips were issued to both buyer and seller was held to be insufficient by itself, since that could equally be consistent with brokerage and convenience of record. The surrounding circumstances showed that the sellers brought the goods themselves, remained present, and the transactions were concluded on the same day or the next day at prices approved by them. In such cases the property in the goods never passed to the assessee, and the assessee merely acted as a broker bringing the parties together. The authority relied on by the department was distinguished on its facts.

Conclusion: The assessee was not a dealer in respect of those face-to-face transactions completed between the buyers and sellers in the presence of the assessee; the question referred was answered in the negative and against the department.

Final Conclusion: The reference was answered in favour of the assessee, with the disputed transactions treated as brokerage arrangements rather than taxable sales by the assessee.

Ratio Decidendi: A commission agent is not a dealer for sales tax purposes unless he carries on the business of buying or selling goods on behalf of principals and the goods pass, actually or constructively, into his control with authority to sell in his own name.

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