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1958 (4) TMI 73 - SC - VAT and Sales TaxWhether the appellants fall within the definition of "dealer" given in Explanation 3 to section 2(c) of the Act? Held that:- The goods in question were directly supplied by the Mills to the customers, whether they were supplied in pursuance of the orders placed by the appellants with the Mills or were supplied in pursuance of orders directly placed by the customers with them. The invoices were all made out in the names of the customers and the relevant documents were negotiated by the Mills with the customers through the Banks. The customers released those documents from the Banks on payment of the relevant drafts and the sale price of the goods was thus received by the Mills through those Banks. At no time whatever was there any handling of the goods or the receipt of the sale price thereof by the appellants in regard to the goods in question and under those circumstances the sale price thereof could not be included in the gross turnover of the appellants. If that was the true position, the appellants were not liable to sales tax in respect of the disputed transactions, even though, perchance, they could be included within the expanded definition of "dealer" in the Explanation 3 to section 2(c) of the Act-a contention which we have already negatived. In regard to the disputed transactions which were of the total value of ₹ 6,21,369-10-3, the appellants were not at all liable to pay sales tax thereupon and the first respondent was clearly in error in assessing the same to sales tax. The appeal will accordingly be allowed and the assessment order made by the first respondent on January 15, 1955, will be set aside. The sales tax of ₹ 27,816 assessed by the first respondent on the appellants, if paid, will be refunded and the appellants will get from the first respondent the costs of this appeal as also the costs incurred by them in contesting the proceedings before the first respondent. Appeal allowed.
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