Dealer status and purchase tax: cultivators selling their own jute sticks were not taxable sellers, so the levy failed.

Cultivators selling jute sticks from their own agricultural produce were not dealers because selling one's own produce, as the culmination of agricultural operations, does not by itself amount to carrying on the business of selling. As the sellers were not dealers within section 2(c), purchase tax under section 4(6)(i) of the Bengal Finance (Sales Tax) Act, 1941 was not attracted on purchases from them for manufacture. The burden to show that the cultivators were middlemen or otherwise dealers was not discharged, so the levy of purchase tax on the applicant's purchase of jute sticks was unsustainable and was set aside.

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Issues: Whether cultivators selling jute sticks could be treated as dealers for the purpose of levy of purchase tax under section 4(6)(i) of the Bengal Finance (Sales Tax) Act, 1941, and whether the purchase of jute sticks by the applicant was exigible to such tax.

Analysis: Purchase tax under section 4(6)(i) is attracted where goods are purchased from a dealer not registered under the Act for direct use in manufacture. A person is a dealer only if he carries on the business of selling goods. The sellers here were cultivators selling their agricultural produce. Selling one's own produce as the culmination of agricultural operations does not by itself amount to carrying on the business of selling. On the materials on record, the cultivators could not be treated as middlemen or dealers, and the burden to prove otherwise was not discharged by the respondents.

Conclusion: The cultivators were not dealers within section 2(c), so section 4(6)(i) was not attracted. The levy of purchase tax on the applicant's purchase of jute sticks was unsustainable and was set aside.

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