Agency plus financing under sales tax law: a contract labeled the appellant as agent and supported deemed dealer treatment.

An agreement naming the appellant as the non-resident company's agent, requiring it to take delivery and store castor seed on the company's behalf, advance part of the price, and hold the goods as security, showed that its role was not limited to financing. Applying the ordinary meaning of "agent" under section 182 of the Indian Contract Act, 1872, the Supreme Court held that the Hyderabad General Sales Tax Act, 1950 did not require any additional authority to buy on behalf of the principal before section 18 could apply. The appellant was therefore both financier and agent, and was assessable as a deemed dealer.

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Issues: Whether the appellant firm was merely a financier or was also an agent of the non-resident company, and consequently whether it was liable to be treated as a dealer under section 18 of the Hyderabad General Sales Tax Act, 1950.

Analysis: The agreement expressly described the appellant as the company's agent and required it to take delivery of the castor seed, store the goods on the company's behalf, advance part of the price, and act in relation to the goods as security for the loan. The Court applied the ordinary meaning of "agent" as reflected in section 182 of the Indian Contract Act, 1872, and held that the appellant's role was not confined to financing. The Hyderabad Act contained no special restriction requiring an agent to have authority to buy on behalf of the principal before section 18 could apply, and the reliance on decisions under differently worded sales tax statutes was held to be inapposite.

Conclusion: The appellant was both a financier and an agent of the non-resident company, and was rightly assessed as a deemed dealer under section 18 of the Hyderabad General Sales Tax Act, 1950.

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