The liability to pay sales tax does not depend on whether the business carried on by the dealer is lawful or not.

E. S. VENKATARAMIAH, J.

( 1 ) THE petitioner was a successful bidder at an excise auction held for the privilege of vending toddy in the district of South Kanara for the year 1971-72, i. e. , from 1st July, 1971, to 30th June, 1972. It would appear that immediately after he was declared as a successful bidder he entered into an agreement with several other to vend toddy at different places within the district of South kanara as it was permissible under the provisions of the Excise Act and the Rules made thereunder to get such sub-leases recognised. On the basis of the sub-leases granted by the petitioner the sub-lessees commenced to vend toddy at the places assigned to them on payment of the agreed amount to the petitioner. The petitioner brought to the notice of the excise authorities that he had sub-leased his privilege in favour of others and requested them to recognise the same. Before the excise authorities could make an order recognising the sub-leases the period of lease was over. Hence no order was passed on the application of the petitioner. So far as his liability under the Excise Act is concerned it is stated that the petitioner has discharged the same.

( 2 ) THE turnover in respect of sale of toddy is subject to payment of sales tax under the Karnataka sales Tax Act (hereinafter referred to as the Act ). The petitioner did not register himself as a dealer under the Act notwithstanding the fact that he was asked to do so by the authorities under the Act, as he did not intend to sell toddy and that it was being sold by his sub-lessees as already mentioned. The Commercial Tax Officer was of the view that the petitioner was a dealer in toddy and he was liable to pay sales tax in respect of the turnover relating to the sales of toddy at several places in respect of which he had the privilege under the excise law. He, therefore, passed an order of assessment against the petitioner. The petitioner instead of filing an appeal filed a revision petition before the Deputy Commissioner of Commercial Taxes. The Deputy commissioner rejected it. This petition is filed against the order passed by the Deputy commissioner of Commercial Taxes and the order of assessment passed by the Commercial Tax officer.

( 3 ) THE contention urged by Sri K. Srinivasan, the learned counsel for the petitioner, is that even though the petitioner was the holder of a licence to vend toddy in the entire district during the relevant period he was not liable to pay any sales tax as he had not sold toddy and also there was no evidence to show that anybody else had sold toddy on his behalf. But it is argued on behalf of the department by Sri H. N. Narayan, the learned High Court Government Pleader, that because at several places in the district of South Kanara toddy was being sold by the sub-lessees of the petitioner, the petitioner must be held liable to pay sales tax in respect of the entire turnover. It is also stated that in the instant case the sub-leases had not been approved by the excise authorities and hence the sales effected by the sub-lessees should be treated as sales effected by the petitioner himself.

( 4 ) UNDER the Act sales tax is payable only by a dealer or by some other person so liable under the act to pay the tax. The department is of the view that the petitioner is liable to pay sales tax as a dealer. The expression "dealer" has been defined in the Act as follows :

"'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration, and includes. . . . "

The rest of the definition is not necessary for the purpose of this case.

( 5 ) THE contention of the petitioner is that neither he nor any person acting within the scope of his authority had sold toddy during the relevant period. IT is seen from the orders passed by the commercial Tax Officer and the Deputy Commiss

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