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TMI Blog1970 (3) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... Lucknow, referred the following three questions of law for the opinion of this court under section 11(1), U.P. Sales Tax Act"(1) Whether under the circumstances of this case the applicant can be treated to be carrying on business activity within U.P. so as to be classified as the dealer for the purposes of assessment?" (2) Whether under the circumstances of this case the applicant can be treated to be an importer against whom an assessment can be passed? (3) Whether under the circumstances of this case the Sales Tax Officer at Barabanki who had been so directed as having jurisdiction was vested with the jurisdiction to pass the assessment?" For deciding the first question, the relevant facts are: The assessee carries on the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives in Uttar Pradesh, who then sold them by going from door to door, or by the customers through a bank against payment. The assessee sent the railway receipts to its bankers in U.P., after endorsing them in their favour and they delivered them to the customers, after receiving payments from them and endorsing them in their favour. On these facts, it was found that in so far as the goods were delivered to the assessee's representatives in Uttar Pradesh, the sale by the representatives of the assessee by going from door to door, would be sale of goods by the assessee itself. In relation to the delivery made to customers through a bank against payment, it was held that the bankers acted as an agent of the assessee. Hence, this activity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the State of Punjab and received price of the goods within the State of Punjab were ancillary activities of the assessee, which did not amount to carrying on trade within the State of Punjab. This principle is applicable to the facts of our case. Here also, the assessee had supplied goods to customers, and collected the price in U.P. The orders were received directly at Calcutta. They were executed at Calcutta. The assessee had no shop or office or representative in Uttar Pradesh. In the circumstances, the fact that the goods were supplied and price collected in U.P. would be an ancillary activity of the assessee and would not amount to carrying on the business of selling within Uttar Pradesh. The fact that the assessee entrusted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the bank. Learned counsel for the assessee relied on the decision of the Supreme Court in Commissioner of Sales Tax, U.P. v. D.C. Dhimani and Brothers Ltd.[1970] 25 S.T.C. 12 (S.C.). That case, in our opinion, is not helpful. There, the assessee carried on the work of fabricating wagons and coaches at Izatnagar in Uttar Pradesh. They were then supplied to the railway administration within the State of Uttar Pradesh. The Supreme Court held that the assessee was carrying on the work of manufacturing wagons and coaches in Uttar Pradesh and this manufacturing would not make him a "dealer" because he did not carry on the business of selling goods in Uttar Pradesh. It was also held that a single or stray instance of selling will not be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r can be said to be carrying on the business of selling in the State. GULATI, J.-I agree with brother Satish Chandra, J., that question No. (1) should be answered in favour of the assessee and the remaining two questions need not be answered but I wish to add a few words by way of elucidation. The statement of the case, as originally submitted by the revising authority, opens thus: "The applicant is a concern having its head office at Calcutta dealing in yarn. The applicant used to import yarn in his own name and receive delivery thereof at Barabanki whereafter sale of the yarn so received was effected........ " Similar observations were found at two places in the revisional order. When the matter came up for hearing before a Bench cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d they sold the goods by going from door to door. That modus operandi would certainly make the assessee a dealer in Uttar Pradesh but the fact that in the present case the assessee delivered the railway receipts to its bankers at Calcutta while in the case of Nestles' Products(1), the documents were sent to banks in U.P., would afford no ground of distinction because in either case the banks' agency would be limited to the collection of the price of the goods from the customers. There is nothing to show that on the failure of the customers to retire the documents, the banks would take delivery of the goods on behalf of the assessee and would proceed to sell them. Such a course of conduct is against the established practice of the banking sy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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