Commission-agent sales form part of gross turnover unless the statute expressly removes them from the charging provision.

Sales effected through commission agents are included in a dealer's gross turnover for determining liability under the U.P. Sales Tax Act unless the statute itself takes the transaction outside the charging provision. Section 3 fixes tax liability on gross turnover, while section 4 deals with exemption and the ultimate tax payable; an exemption notification does not by itself exclude the sales from turnover. The definition of "turnover" is broad enough to cover sales made directly or through another on the dealer's account, and the explanation to section 3 operates only to prevent double taxation where the commission agent has already paid tax on the same turnover.

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Issues: Whether sales of khandsari sugar effected through commission agents and exempted from sales tax by notification could be excluded from the assessee's gross turnover for determining liability to tax under the U.P. Sales Tax Act.

Analysis: Section 3 of the Act is the charging provision and determines liability to tax on the basis of gross turnover, while section 4 deals with exemption and payability of tax. The definition of "turnover" in section 2(i) is wide enough to include sales made directly or through another on a dealer's account. The explanation to section 3 prevents double taxation where the commission agent has already paid tax on the same turnover, but it does not exclude such sales from the principal's gross turnover for the purpose of determining liability. The earlier decisions were treated as settling the law that all sales effected by a dealer, including those through commission agents, enter the gross turnover unless the Act itself takes the transaction outside the charging provision.

Conclusion: The sales of khandsari sugar made through commission agents were includible in the assessee's gross turnover. The question was answered in the negative, in favour of Revenue and against the assessee.

Ratio Decidendi: Unless the statute expressly excludes a transaction from the charging provision, sales effected through commission agents form part of the dealer's gross turnover for determining liability to tax, even where a separate exemption may affect the ultimate tax payable.

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