Co-operative housing society not treated as dealer where member-funded brick supply was held outside taxable sale

A co-operative housing society was not treated as a dealer under the U.P. Sales Tax Act because the brick-kiln was funded by members' contributions for supply of bricks to themselves, not from the society's own trading funds. On those facts, the bricks never became the society's property, so there was no transfer of property for a price and no taxable sale. Mere maintenance of accounts and collection of amounts from members did not convert the arrangement into a business of buying and selling goods. The arrangement was treated as a joint venture or agency for distribution of bricks, with no sales tax liability.

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Issues: Whether the co-operative housing society effected a sale of bricks to its members as a dealer in the regular course of business.

Analysis: Liability under the U.P. Sales Tax Act depends on there being a sale by a dealer carrying on the business of buying and selling goods. The material on record showed that the brick-kiln was not financed from the society's own funds but from contributions made by members for the supply of bricks to themselves for constructing their houses. On those facts, the bricks did not become the society's property and there could be no transfer of property by the society for a price. Maintenance of accounts and collection of amounts from members did not by itself make the society a dealer or convert the arrangement into a taxable sale. The arrangement was treated as a joint venture or agency for distribution of bricks to members.

Conclusion: The society did not effect a taxable sale of bricks to its members and was not liable as a dealer.

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