First taxable sale requires a dealer acting in business; customs auction disposals do not alter that rule.

Sales of confiscated goods by customs authorities through auctioneers were not sales by a dealer in the course of business. The auctioneers only connected buyers and sellers, had no dominion or possession of the goods, and the collection of sales tax by them did not make them dealers. The customs department's periodic disposal of confiscated goods was a statutory function, not trading activity. For section 3(2) read with section 2(n), the first taxable sale is the first sale by a dealer in the course of business inside the State, not merely the first factual sale by any person. The assessee's sales were therefore the first taxable sales.

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Issues: Whether sales of confiscated goods by customs authorities through auctioneers amounted to sales by a dealer in the course of business so as to make the assessee's sales the first taxable sales under section 3(2) and the relevant items of the First Schedule to the General Sales Tax Act, 1959.

Analysis: The auctioneers merely brought buyer and seller together and had neither dominion over nor possession of the goods. Collection of sales tax by them did not make them dealers. The customs department also was not carrying on business when it periodically sold confiscated goods in discharge of statutory functions. Under section 3(2), read with section 2(n), the first sale contemplated by the Schedule is the first sale by a dealer in the course of business inside the State, not merely the first factual sale by any person.

Conclusion: The sales by the customs authorities and auctioneers were not sales by a dealer in the course of business, and the assessee's sales were rightly treated as the first taxable sales. The challenge failed.

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