Commission agent tax liability on khali purchases: section 4B exemption and Form IIIB did not relieve liability.

A commission agent purchasing khali for a manufacturer is treated as a dealer under the U.P. Trade Tax Act, 1948 and remains liable to tax. Exemption under section 4B(1) is confined to a dealer holding a recognition certificate, while clause (a1) applies only to declared goods; khali was not treated as declared goods, so concessional treatment was unavailable. Issuance of form IIIB by the principal-manufacturer did not alter the commission agent's tax liability, and section 3D(3) operated only in the specific situation where the commission agent had paid tax on behalf of the principal.

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Issues: Whether a commission agent purchasing khali on behalf of a manufacturer was entitled to exemption or concessional treatment under section 4B of the U.P. Trade Tax Act, 1948, and whether issuance of form IIIB by the principal-manufacturer affected the tax liability of the commission agent.

Analysis: The commission agent falls within the definition of dealer under section 2(c) of the U.P. Trade Tax Act, 1948 and is therefore liable to tax under the Act. The benefit under section 4B(1) is available only to a dealer holding a recognition certificate, while clause (a1) extends relief only in respect of declared goods. Khali was not treated as a declared commodity, so clause (a1) did not apply. The issuance of form IIIB by the principal-manufacturer was held to be irrelevant to the commission agent's tax liability. The decision also noted that section 3D(3) only operates to shift liability in the specified situation where the commission agent has paid tax on behalf of the principal.

Conclusion: The commission agent was not entitled to exemption under section 4B of the U.P. Trade Tax Act, 1948, and the tax could validly be levied on the purchases of khali.

Final Conclusion: The revision succeeded, the Tribunal's deletion of tax was set aside, and the matter was remitted for passing an appropriate order under section 11(8) of the U.P. Trade Tax Act, 1948.

Ratio Decidendi: A commission agent is liable to tax as a dealer, but exemption under section 4B is confined to the statutorily specified class of dealers and to declared goods, and form IIIB issued by the principal does not by itself alter the commission agent's tax liability.

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