D.M. Bhandari, C.J.
1. These two applications have been filed by the Commercial Taxes Officer, Ajmer, under Section 15(3A) of the Rajasthan Sales Tax Act, 1954 (hereinafter called the Act) praying that this court may direct the Board of Revenue for Rajasthan to state the case and refer it to this court.
2. In both these applications, the respondent is the firm Messrs. M.H. Shah & Co., which was appointed as railway auctioneer under the terms and conditions mentioned in the agreement exhibit 1 dated 7th April, 1962, for auctioning 'the coal ashes of the Union of India pertaining to the Western Railway. The respondent was assessed to sales tax for the accounting years 1962-63 and 1963-64 by two separate assessment orders. But later on proceedings were taken against the respondent under Section 12 of the Act by issuing notices to it to show cause why it should not be reassessed and it was reassessed on 10th September, 1965, by the Commercial Taxes Officer, Ajmer. Two separate appeals were filed by the respondent to the Deputy Commissioner (Appeals), Ajmer. They were dismissed on 19th May, 1966. Two separate revision applications were filed by the respondents to the Board of Revenue for Rajasthan and the Board of Revenue has taken the view that the respondent was not a dealer within the definition of Section 2 of the Act and taking this view, it set aside the orders of reassessment on 28th April, 1967. The Commercial Taxes Officer, Ajmer, had, therefore, filed these two applications under Section 15(3A) as after having filed the applications under Section 15(1) before the Board of Revenue, the Board failed to dispose of that applications within the prescribed time of 120 days. The sole question in these two cases is whether the respondent falls within the definition of dealer as defined under Section 2(f) of the Act.
3. Learned Additional Advocate-General has urged on behalf of the petitioner that an auctioneer is included within the definition of dealer under Section 2(f)(iii) and as such the respondent is liable to pay sales tax. The relevant part of the definition of dealer is quoted below :
'Dealer'...includes (iii) an auctioneer...who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal.
4. It is to be examined in these two cases whether the respondent carries on the business of selling coal ash on behalf of the railway administration. We have examined the agreement exhibit 1 dated 7th April, 1962, by which the President, on behalf of the Union of India as the executive authority of the administration of Western Railway, had appointed the respondent as an auctioneer. It is provided in the agreement that the auctioneer shall conduct sales by public auction at all places of the Western Railway for a period of one year of coal ashes belonging to the administration which they may be entrusted with from time to time by the Chief Engineer of the administration at Bombay for disposal by auction. Under the agreement, it is the Chief Engineer who will determine the conditions of sale and the place and time, where and when the sales are to be held. The Chief Engineer is also to determine the period of delivery within which the coal ashes will be removed from the railway premises and such other particulars as the Chief Engineer may deem necessary. The auctioneers are to auction all coal ashes in convenient lots, but the arrangement of the lots is to rest with the administration and the auctioneers are prohibited from purchasing any of the lots themselves 'or through their agents without the prior consent of the administration. It is therein provided that a railway officer, as may be authorised in this behalf, shall be present at the auction sale to supervise them in lots. The auctioheers are to collect the earnest money on the fall of hammer for each accepted bid and credit it to the administration. The bids are subject to subsequent acceptance by the Chief Engineer/Divisional Superintendent. The balance of the purchase price is to be paid by the purchaser within five working days of the sale or the intimation to him that the Chief Engineer/Divisional Superintendent has accepted the bid, to the Chief Cashier, Western Railway, and the auctioneers, after satisfying themselves fully about the receipt are to hand over the delivery order to the purchaser to enable him to take delivery of the coal ashes. The auctioneers are entitled to be paid commission on the gross proceeds of completed sales as specified in the schedule annexed to the agreement.
5. The aforesaid terms of the agreement clearly point out that the auctioneers are not themselves carrying on the business of selling coal ashes. They are merely appointed to carry on certain functions in the process of selling by the railway administration of the coal ashes as their appointed servants could have done. The learned Additional Advocate-General has argued that under Clause (5) of the agreement, a duty has been cast on the auctioneer to settle all disputes with bidders or purchasers regarding incorrect description, quality and quantity of the coal ashes sold to them arising out of erroneous descriptions, etc., due to errors in printing or otherwise and they are responsible for indemnifying the railway administration against all claims or losses which they may suffer in consequence thereof. It is also argued that the delivery orders are to be given by the auctioneers. Simply because these two conditions have been inserted in the agreement exhibit 1, it cannot be taken that the auctioneers are to carry on the business of selling coal ashes which remain the property of the administration throughout the sale and which are to be sold under the direction and supervision of the railway administration and further, the sale price is to be deposited with the cashier of the railway administration. It may also be mentioned that the final acceptance of the bids is to be made by the Chief Engineer/ Divisional Superintendent of the railway administration. Thus, in this process of sale, all the important functions relating to the passing of the property from the railway administration to the purchaser are to be done by the railway, administration and it cannot be said by any stretch of imagination that the auctioneers were carrying on the business of selling the coal ashes on behalf of the principal, in Zackria Sons Private Limited v. State of Madras [1965] 16 S.T.C. 136 the question whether an auctioneer is a dealer within the meaning of Section 2(g) of the Madras General Sales Tax Act, 1959, was considered and it was held that where an auctioneer functioned only as an agent to secure the most advantageous bid for the principal in the auction and thereafter it was the principal's agent who accepted the offer of the highest bidder and completed the contract, the auctioneer could not fall within the definition of dealer in Section 2(g) of that Act. In that definition, dealer included an auctioneer or any other mercantile agent, by whatever name he was called, who carried on the business of buying and selling, supplying or distributing goods on behalf of any principal. In our humble opinion, the principle laid down in that case is correct and is as much applicable to the definition of dealer under the Act as it is applicable to the case of an auctioneer under the Madras Act. We may also refer to another case of the Madras High Court. In S. Krishna-machari v. The State of Madras [1965] 16 S.T.C. 136 a person undertook to vend on a railway station platform and along the train side, food packets, refreshments and beverages prepared by the administration at the vegetarian refreshment room under an agreement. The agreement provided that that person would employ his own servants for the vending and he would sell the edibles at the prices fixed by the administration and shall be paid a commission on the sales made by it. It was held that he was not a dealer. The learned Judges pointed out that the existence of a right to give directions in the performance of duties and of a power to take disciplinary action on default showed that that person was nothing more than a servant and not a dealer.
6. In our opinion, the respondent was not a dealer falling within the meaning of Section 2(f) of the Act. No case has been made out for directing the Board of Revenue for Rajasthan to state the case. The applications are, therefore, rejected with costs.