Dealer liability through agency and stock appropriation can amount to sale when title passes from principal to agent.

Residence is irrelevant to dealer liability under the Orissa Sales Tax Act where a person carries on business of purchasing, selling or supplying goods in the State through an agent. The Act's definition of "dealer" extends to such business activity, and the presence of a resident-outside-Orissa agent does not exclude the principal from assessment. Appropriation of stock by the agent to his own account constitutes a sale where title passes from the principal to the agent in a separate legal capacity. On that basis, the assessments were sustained and the challenge failed.

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Issues: (i) Whether a non-resident principal carrying on sales through an agent within the State is liable as a dealer under the Orissa Sales Tax Act. (ii) Whether appropriation of stock by the agent to his own account amounts to a sale.

Issue (i): Whether a non-resident principal carrying on sales through an agent within the State is liable as a dealer under the Orissa Sales Tax Act.

Analysis: The definition of "dealer" in section 2(c) of the Act turns on carrying on business of purchasing, selling or supplying goods in Orissa, and residence is immaterial to that enquiry. The explanation makes the resident-outside-Orissa agent also a dealer, but does not exclude the principal from liability where the principal itself carries on business within the State through such agency arrangements.

Conclusion: The petitioner was rightly treated as a dealer and its liability under the Act was not displaced by the presence of an agent in Orissa.

Issue (ii): Whether appropriation of stock by the agent to his own account amounts to a sale.

Analysis: A sale requires transfer of title between different persons. On the facts found, title remained with the petitioner while the goods lay in the agent's godown, and title passed only when the agent appropriated the goods to his own account and claimed commission. That transaction involved a transfer of ownership from the petitioner, acting through its agent in one capacity, to the agent in his independent capacity, and therefore satisfied the ingredients of sale.

Conclusion: The transfer of stock to the agent's own account amounted to a sale.

Final Conclusion: The assessments were sustained, the writ challenge failed, and no interference was warranted, though the assessing authority was cautioned to distinguish clearly between different types of transactions in future assessments.

Ratio Decidendi: For sales tax purposes, residence is irrelevant to dealer liability if business of selling is carried on within the State, and appropriation of goods by an agent to his own account constitutes a sale where title passes from the principal to the agent in a different legal capacity.

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