Agency and turnover under U.P. sales tax: commission agent with bargaining authority treated as dealer; agricultural produce exemption denied.

An agent who settles rates, issues sale and purchase slips, charges commission, and pays sellers from its own funds is treated as a dealer for U.P. sales tax purposes where it has authority to conclude bargains on behalf of agriculturist-members. The turnover definition also covers sales made through another on the dealer's account, while the exemption for agricultural produce is confined to produce grown by the dealer himself or on land in which he has the relevant interest. The term "otherwise" in the proviso is read ejusdem generis and does not extend the exemption to a mere agent selling members' produce. The sale proceeds are therefore includible in turnover.

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Issues: (i) whether the assessee was a dealer in relation to the transactions of its agriculturist-members under the U.P. Sales Tax Act; (ii) whether the sale of agricultural produce grown by the agriculturist-members was includible in the assessee's turnover.

Issue (i): Whether the assessee was a dealer in relation to the transactions of its agriculturist-members under the U.P. Sales Tax Act.

Analysis: The material facts showed that the assessee settled rates with buyers through its broker, charged commission in addition to weighing charges and other amounts, issued sale and purchase slips, and paid the sellers from its own funds. The statement of the society's secretary established that the bargain was struck by the assessee and that the assessee acted not merely as a weigh-man but as a commission agent having authority to conclude the bargain on behalf of the seller. On that basis, the assessee fell within the extended meaning of dealer under the explanation to Section 2(c).

Conclusion: The assessee was a dealer in respect of those transactions, and this issue was decided against the assessee.

Issue (ii): Whether the sale of agricultural produce grown by the agriculturist-members was includible in the assessee's turnover.

Analysis: The definition of turnover in Section 2(i) covered sales by a dealer directly or through another on his account or on account of others, and the proviso excluded only sales of agricultural produce grown by the dealer himself or grown on land in which the dealer had an interest. The assessee did not grow the produce and had no relevant interest in the land. The word "otherwise" in the proviso was construed ejusdem generis with owner, usufructuary mortgagee and tenant, so it did not extend to a mere agent selling members' produce. The statutory exemption was therefore unavailable.

Conclusion: The sale proceeds of the agriculturist-members' produce were includible in the assessee's turnover, and this issue was decided against the assessee.

Final Conclusion: The referred questions were answered in the affirmative, leaving the assessee liable to be treated as a dealer and to include the disputed sale proceeds in turnover for tax purposes.

Ratio Decidendi: An agent who has authority to conclude bargains and effect sales on behalf of agriculturist-members is a dealer for sales tax purposes, and the exemption for agricultural produce is confined to sales by the dealer of produce grown by him or on land in which he has the requisite interest.

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