Taxable point fixed at manufacturer's sale cannot be extended to a commission agent absent express representative liability.

A taxing notification under the U.P. Sales Tax Act fixed liability for khandsari sugar only at the point of sale by the manufacturer. Although a commission agent was generally treated as a dealer and sales through him could form part of turnover, the notification confined the taxable point to the manufacturer's sale and did not extend to a commission agent acting on the manufacturer's behalf. The absence of any statutory provision creating representative liability was decisive, so the analogue of representative assessees under income-tax law did not apply. The commission agent was therefore outside the notified incidence of tax, and liability remained with the manufacturer.

---

---

Issues: Whether a commission agent was liable to pay sales tax on the turnover of khandsari sugar manufactured by his principals under the notification fixing tax only at the point of sale by the manufacturer.

Analysis: The charging scheme of the Act treated a commission agent as a dealer and generally brought sales effected through him within his own turnover. However, the notification issued under section 3-A of the U.P. Sales Tax Act, 1948 altered the incidence of tax for khandsari sugar manufactured in Uttar Pradesh by confining liability to the sale by the manufacturer. The notification was directed not to the first sale in general, but to the sale by the manufacturer specifically. A commission agent selling on behalf of a manufacturer was therefore outside the taxable point fixed by the notification. The analogy of representative assessees under the Income-tax Act, 1961 did not assist the Revenue, because the U.P. Sales Tax Act contained no corresponding provision making the commission agent liable merely in a representative capacity.

Conclusion: The commission agent was not liable to sales tax on the turnover of khandsari sugar manufactured by his principals; the liability under the notification attached only to the manufacturer.

Final Conclusion: The reference was answered against the Revenue and in favour of the assessee by holding that the notified taxable point could not be extended to a commission agent.

Ratio Decidendi: Where a taxing notification fixes liability at the point of sale by the manufacturer, the tax cannot be levied on a commission agent selling the goods on the manufacturer's behalf unless the statute expressly creates a representative liability.

---