Intermediary sale of dry ginger is not a first sale by the dealer for tax purposes under the Act.

A dealer who merely receives dry ginger from cultivators through mandi samiti and forwards it outside the State is not treated as making the first sale in the State. The term "manufacturer" under section 2(ee) was read to apply to the dealer making the first sale of goods after manufacture, and an intermediary cannot sell goods to itself. On that basis, the assessee's delivery forms and mode of dealing showed an intermediary or selling-agent role, so the turnover from sonth sent outside Uttar Pradesh was held not taxable as the assessee's own first sale.

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Issues: Whether the assessee was liable to tax on dry ginger purchased from cultivators through mandi samiti and sent outside Uttar Pradesh, and whether such transactions amounted to a first sale by the assessee as manufacturer under the Act.

Analysis: The assessee received dry ginger from cultivators through mandi samiti and issued delivery forms in a manner showing that it acted only as an intermediary or selling agent. The expression defining manufacturer under section 2(ee) was construed to mean the dealer making the first sale of the goods in the State after manufacture. As the assessee could not sell the goods to itself, the transactions could not be treated as its own first sale in the State. The authorities relied upon were consistent with the principle that an intermediary who merely receives goods from the seller and passes them on is not liable as a dealer making the taxable sale.

Conclusion: The assessee was not liable to pay tax on the turnover of sonth purchased from cultivators and sent outside Uttar Pradesh.

Ratio Decidendi: A dealer who merely acts as an intermediary for goods obtained from cultivators and whose transaction does not amount to a first sale in the State cannot be treated as a manufacturer liable to tax on that turnover.

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