Dealer status and second-sale taxation upheld where goods were bought, held, and resold on the assessee's own account.

A person who buys goods in its own name, pays from its own funds, stores them in its own godown and despatches them to the ultimate buyer is treated as a dealer, not a mere procurement or commission agent. The absence of privity between the original seller and the ultimate buyer, together with possession, control and the right of disposal, supports characterisation as a buying-and-selling business. On that footing, the later transfer to the ultimate buyer is a distinct second sale and the resulting turnover is taxable on a multi-point basis; the exemption claimed was unavailable.

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Issues: (i) Whether the assessee, under the terms of the agreement and the surrounding transaction pattern, was a mere procurement/commission agent or a dealer within the meaning of section 2(g) of the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether the turnover arising from the supply of brass sheets to the ultimate buyer was liable to tax as a second taxable sale.

Issue (i): Whether the assessee, under the terms of the agreement and the surrounding transaction pattern, was a mere procurement/commission agent or a dealer within the meaning of section 2(g) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The agreement showed that the assessee purchased the goods in its own name, paid for them out of its own funds, kept them in its godown, and then despatched them to the ultimate buyer. The assessee also had authority to negotiate purchases at the most advantageous price, could undertake similar transactions for third parties, and was responsible for storage, transport, delivery, and accounting. The seller and the ultimate buyer had no privity of contract and were not even known to each other. These features indicated that the assessee had possession and control over the goods and the right of disposal, which are consistent with the business of buying and selling goods and not with a mere procurement agency.

Conclusion: The assessee was a dealer within section 2(g) of the Tamil Nadu General Sales Tax Act, 1959 and not a mere procurement agent.

Issue (ii): Whether the turnover arising from the supply of brass sheets to the ultimate buyer was liable to tax as a second taxable sale.

Analysis: Since the assessee first purchased the goods from the seller and thereafter sold them to the ultimate buyer from its own stock and on its own account, there were two distinct transactions. The second transaction was a sale by the assessee to the ultimate buyer, taxable on a multi-point basis. The commission-style remuneration in the agreement did not alter the substance of the dealings, and the factual matrix supported taxability of the turnover together with the consequential levies.

Conclusion: The turnover was exigible to tax as a second sale, and the exemption claimed by the assessee was not available.

Final Conclusion: The Tribunal's order was interfered with, the assessee was held liable to tax on the second transaction, and the tax revision petitions were allowed.

Ratio Decidendi: Where a person purchases goods in its own name, holds possession and the right of disposal, and thereafter sells them to an ultimate buyer without privity between the original seller and the ultimate buyer, that person is a dealer and the subsequent turnover is taxable as a separate sale.

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