Agency purchase of gunny bags did not create inter-State sales, and their value was excluded from taxable turnover.

Supply of bardana to ex-U.P. principals was not treated as an inter-State sale because the assessee purchased foodgrains as agent for the principals and procured gunny bags only for packing before dispatch. Under the Central Sales Tax Act, only the price received by the dealer in respect of a sale of goods can enter taxable turnover. As the gunny bags were purchased in the assessee's capacity as agent and the price was effectively attributable to the principals, there was no sale of gunny bags by the assessee. The value of the gunny bags was therefore not includible in the assessee's turnover.

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Issues: Whether the supply of bardana to ex-U.P. principals amounted to inter-State sales and whether the value of the gunny bags could be included in the assessee's turnover under the Central Sales Tax Act.

Analysis: The assessee purchased foodgrains as agent for ex-U.P. principals and, when required, bought gunny bags for packing the goods before dispatch. The sale price includible in turnover under the Central Sales Tax Act is the price received by the dealer in respect of a sale of goods. Since the gunny bags were purchased by the assessee in its capacity as agent for the principals, the purchase of bardana was attributable to the principals and the price was received by the supplier, not by the assessee. In the absence of a sale of gunny bags by the assessee, the amount could not form part of its taxable turnover.

Conclusion: The supply of bardana to the ex-U.P. principals did not amount to inter-State sales, and the value of the gunny bags was not includible in the assessee's turnover.

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