Meaning of the word ’dealer’.

The sole point for consideration in this case is, whether the petitioner, who has been assessed to sales tax in respect of commission earned by him under a contract with the Railway Administration, during a period of two years from 1st August, 1958 to 31st July, 1960, is a “dealer” within the meaning of the Madras General Sales Tax Act, 1959. The petitioner is the Manager of the Swadesamitran. Book Stall at the Railway Station at Tiruchirappalli Junction. Under an agreement with the Railway Administration, he undertook to vend on the station platform and along the train side, food packets, refreshments and beverages prepared by the Administration at the Vegetarian Refreshment Room. He was allowed for the purpose, the use of the vessels, utensils, furniture, stores, etc., belonging to the Administration and was to be paid at the end of each day twelve naye paise per rupee on the value of edibles or beverages, etc., supplied to him. The petitioner should employ his own servants for the vending, but they should possess the specified attributes and submit themselves to periodical medical examination and character investigation by the Administration. If the latter were to consider any servant employed by the petitioner as in any way unfit or had misconducted himself, the petitioner was bound to dismiss him. Petitioner had no right to assign his rights or privileges under the agreement. Notwithstanding the agreement, it was open to the Administration to sell the food packets, refreshments and beverage in its Refreshment Room, stalls, and on the platforms and they could also serve in the train compartments. But there was no corresponding liberty to the petitioner: he was to sell the edibles and drinks, as prepared by the catering department of the Administration, at specified places and during the hours when the Refreshment Room was working, at prices fixed by it. He was to be supplied his daily requirements and he was bound to remit “the entire sale proceeds of the articles supplied during the day intact to the Vegetarian Refreshment Room Manager”. There were stipulations as to the furnishing of security by the petitioner, for his and his servants’ orderly conduct, for forfeiture of security and termination of the agreement. Clause 17 of the agreement stated that the petitioner was liable to pay, at the sole discretion of the Administration, a fine of not exceeding Rs. 100 for complaints, which, in its opinion, had been substantiated against him, in the matter of the sale of the articles. Clause 21 required that the petitioner and his servants should carry out the instructions given by the authorised officials of the Administration in the day to day performance of the agreement.

These provisions indicate that there was a great degree of control and direction by the Administration in respect of the manner in which the food packets, etc., were to be sold by the petitioner to the railway passengers.

Though the agreement is not clear about it, the Tribunal below has held that unsold refreshments could not be returned by the petitioner vendor to the Administration ; but, on the contrary, he would be liable to the latter for their price. Clause 18 (it), however, speaks only of the vendor remitting the entire sale proceeds of the articles supplied ; it has no reference to the petitioner being liable for the price himself. That, however, is not of much importance, as both the parties appear to have contemplated that the vendor would indent only for such quantity of the food articles as would be necessary, it being not open to him to sell them to outsiders. The agreement provided that neither the vendor nor his servants could claim compensation or damages for injury sustained during the course of the performance of their duties.

The departmental officers held that the agreement envisaged a sale by the Administration of the food packets, etc., to the petitioner and a second sale by him to the passengers of the Railway. T