Second dealer status under sales tax law upheld where resale was independent and no agency in interstate movement was proved.

An independent registered dealer that purchased goods on its own account and resold them within Kerala was treated as a second dealer, because there was no proof that it acted as an agent or intermediary in the original movement of the goods from Rajasthan. The Rajasthan dealer invoiced the goods in the name of the Kerala distributor, who then issued separate bills to the assessees, collected sales tax, and furnished the certificate required under rule 32(13) of the Kerala General Sales Tax Rules, 1963. On these facts, the contract between the distributor and the assessees was distinct from the earlier transaction, so the assessees were not liable to tax on the impugned second sale.

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Issues: Whether the assessees were only second dealers in the State and therefore not liable to tax on the sale of manure.

Analysis: The goods were transported from Rajasthan to Kerala, but the Rajasthan dealer invoiced the goods in the name of the Kerala distributor, who in turn raised separate bills on the assessees and collected sales tax. The distributor also issued the certificate contemplated by rule 32(13) of the Kerala General Sales Tax Rules, 1963. There was no material to show that the distributor acted as an agent or intermediary of the Rajasthan dealer or that the movement of goods from Rajasthan to Kerala was pursuant to any contract of sale between the distributor and the assessees. On the facts found, the contract between the distributor and the assessees was distinct from the earlier transaction by which the distributor obtained the goods.

Conclusion: The assessees were rightly treated as second dealers in the State and were not liable to tax on the impugned second sale.

Ratio Decidendi: Where an independent registered dealer purchases goods on its own account and resells them within the State, without proof that it acted as an agent or intermediary in the original movement of goods from outside the State, the subsequent seller may be treated as a second dealer not liable to tax on the earlier point of sale.

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