( 1. ) THIS is a reference under Section 44 (1) of the M. P. General Sales Tax Act, 1958. The questions referred for our decision are:

(1) Under the facts and the circumstances of the case, is the sale of cotton by auction under the cotton pool scheme a sale by the society liable to tax under the scheme of the M. P. General Sales Tax Act, 1958? (2) Are the oil-engines and centrifugal pumps sold by the society agricultural machinery? (3) Are such of the oil-engines and centrifugal pumps as have been sold to agriculturists for bona fide agricultural purposes, agricultural machinery for the purposes of item 44 of Part II of Schedule II appended to the M. P. General Sales Tax Act, 1958?

( 2. ) THE society-The Madhya Pradesh State Co-operative Marketing Society, Jabalpur-is a registered dealer under the Madhya Pradesh General Sales Tax Act, 1958. The assessment in question is for the period from 1st July, 1959 to 30th June, 1960. The only items regarding which the abovesaid questions are framed are:

(i) Sales to the extent of Rs. 2,76,416. 00 on account of transactions under the cotton pool scheme at the Burhanpur branch of the society, and (ii) Sales of the centrifugal oil-engines and pumping sets. As to the transactions under the cotton pool scheme, the submission of the assessee was that the society acted merely as an auctioneer and not as a dealer; hence the sales of cotton should not have been included in the turnover of the assessee. As to the oil-engines, the submission was that they, being agricultural machineries, were taxable under Part VI of Schedule II and not under item No. 44 of Part II of the Second Schedule. Both these contentions were negatived by the Tribunal. The Tribunal, however, referred the abovesaid questions as in the opinion of the Tribunal, questions of law were involved.

( 3. ) WHILE rejecting the contentions of the assessee, the Assistant Commissioner held-The society had complete domination and control and full authority to sell the cotton pooled in any manner they liked and to any person they deemed fit for the purpose of obtaining a fair price. The sale bills were made by the marketing society in the name of the purchasers and the purchasers in their own turn remitted the sale proceeds to the accounts of the marketing society. The society also showed these transactions of sales and purchases in their trial balance of profit and loss accounts. These transactions are, therefore, nothing but sales liable to be taxed at the hands , of the appellants. This finding was confirmed by the Tribunal. The Tribunal further added As stated above, even if the society is acting as a commission agent or an auctioneer, it is liable to be regarded as a dealer and would be liable to be taxed under Section 4 of the Act for sales or supplies of goods effected in Madhya Pradesh.

( 4. ) SHRI Shrivastava, learned counsel for the assessee, however, urged that the finding of the Assistant Commissioner that the society had complete domination and control and full authority in selling the cotton in the pool, is not justified from the facts on record. He urged that the possession and control over the cotton, which was pooled, remained with the agricultural associations and not with the marketing society. He also urged that the price offered at the auctions held by the marketing society was to be approved by the agricultural associations or by the owner of the cotton himself. In these circumstances, Shri Shrivastava urged that it cannot be held that the marketing society really effected the sales and it should have been held that it only acted as an auctioneer. There is no basis for this contention.

( 5. ) FROM annexure d, which contains the rules framed by the Director of Agriculture for regulating the execution of the cotton pool scheme, it appears that the marketing society is to work as the central organisation for the cotton pool scheme. It is the marketing society which is authorised to appoint as its sub-agents agricult