JUDGMENT This is a reference by the Board of Revenue, Madhya Pradesh, under section 23(1) of the Madhya Pradesh Sales Tax Act, 1947, referring six questions for the opinion of the High Court. Those questions are :- "(1) Whether on the facts and circumstances of this case the sales are effected through and by the assessee as a commission agent acting as a dealer under section 2(c) of the Act ? (2) Whether there is any privity of contract established at any stage between the Bepari and the weaver ? (3) Whether the assessee acquired possession and control either actual or constructive over the goods at any stage ? (4) Whether on the facts and circumstances of this case, the non-applicant is a 'dealer' within the meaning of section 2(c) of the C.P. and Berar Sales Tax Act, 1947, or is a broker not falling within the said section ? (5) If the assessee's function as a 'broker' is within the mischief of the Sales Tax Act, are the provisions so making it intra vires ? (6) Are the relevant provisions of the Sales Tax Act within the legislative competence of the Provincial Legislature functioning under Entry No. 48 of the Seventh Schedule to the Government of India Act ?" For the purpose of the reference the learned Member has stated facts in detail. He has also given his opinion and the history of the case before the Sales Tax Authorities. Though they help us, we are not concerned with these. 2. The dispute is between the Sales Tax Authorities (hereinafter 'the Department') and one Pandurang Tukaram Dalal of Nagpur (hereinafter 'the assessee'). The assessee is a registered dealer who registered voluntarily. His accounts are from Divali to Divali and the present dispute concerns the period between Divali 1949 and Divali 1950. The assessee filed blank returns for the year, explaining that he was a kachcha adatia and though transactions for the sale of sarees brought by weavers to his counter and purchased therefrom by the Beparis (a term used in the trade to denote purchasers of such cloth) were negotiated by him, he did not come within the definition of a "dealer" given in the Sales Tax Act. He also contended that though Entry No. 48 of List II of the Seventh Schedule to the Government of India Act, 1935, entitled the Provincial Legislature to frame a law with regard to sale of goods, it did not authorise the enactment of a law taxing brokers. The Sales Tax Officer, Nagpur, Circle II, held that the assessee was liable to pay the sales tax on his turnover, of which he found evidence in respect of such transactions in the account books to the extent of Rs. 48,000; but since the accounts were not complete, he made a best judgment assessment on the basis of Rs. 96,000, charging the assessee Rs. 2,202-8-0 as tax. In reaching his conclusion, the Sales Tax Officer took into account that there was a transaction of sale between the weaver and the assessee and that the latter in his turn sold the goods to the Beparis. He deduced this from the fact that bills were made out in the name of the assessee and he had dominion over the goods, that he collected sales tax from some of the Beparis and had registered himself as a dealer on his own initiative. The Sales Tax Officer, therefore, held that the assessee was a dealer within the definition and not a kachcha adatiya (See Form XIV at page 65 of the paper book). 3. Against this order the assessee appealed to the Assistant Commissioner of Sales Tax, Nagpur Region, Nagpur (Sales Tax Appeal No. 32/1-A-6 of 1954). The Assistant Commissioner of Sales Tax, by his order dated 15th June, 1954, upheld all the conclusions of the Sales Tax Officer and enhanced the tax to Rs. 5,243-3-0 since he found evidence to justify the imposition of this enhanced tax. The assessee then appealed to the Deputy Commissioner of Sales Tax, Madhya Pradesh (Second Sales Tax Appeal No. 240/S.A./1-6-1954). The Deputy Commissioner by his order dated 10th July, 1954, dismissed the appeal. The assessee then filed an application for revision before the Board of Revenue, Madhya Pradesh, Nagpur (Application No. 56/XXXIII-7 of 1954) and the Board of Revenue by its order dated 23rd November, 1954, reversed the decision of the Taxing Authorities. 4. Against this decision an application for review was presented by the State of Madhya Pradesh on 29th November, 1954. The assessee then filed an application for revision before the Board of Revenue, Madhya Pradesh, Nagpur (Application No. 56/XXXIII-7 of 1954) and the Board of Revenue by its order dated 23rd November, 1954, reversed the decision of the Taxing Authorities. 4. Against this decision an application for review was presented by the State of Madhya Pradesh on 29th November, 1954. The application was rejected on 23rd December, 1954, the learned Member holding that the order passed by him did not come in conflict with the principles laid down by the Board in certain previous cases. The State Government then applied for a reference under section 23(1) of the Madhya Pradesh Sales Tax Act, 1947, requesting that the case be referred for the opinion of the High Court on five questions of law, which need not be mentioned here because the application was granted resulting in the present reference. 5. The learned Member of the Board of Revenue who made the reference stated the facts in the shape of an agreed version as to the method of business followed by the assessee. This is given below :- "(1) The weaver puts the sarees at the counter of the applicant (assessee) for examination by the applicant (assessee) and the prospective buyers. (2) The price is negotiated between the buyer and the seller though the applicant (assessee), the seller being present throughout the negotiations. (3) If the price is settled, a chit is placed in the saree and the transaction is closed. If the Bepari changes his mind on account of any defect in the saree, it cannot be returned to the seller after this chit has been placed in the saree. (4) If the seller does not agree to sell the saree at the price offered by the buyer even after the higgling done by the applicant (assessee) to bring about a settlement of the price, the seller takes away his goods to some other shop where there are Beparis. (5) The payment is received by the seller from the applicant (assessee) at the chukara time towards the end of the day. (6) The applicant (assessee) recovers the amount from the buyer by giving him a bill in the name of his adat shop." After stating his opinion, the learned Member referred the six questions quoted in paragraph 1. (5) The payment is received by the seller from the applicant (assessee) at the chukara time towards the end of the day. (6) The applicant (assessee) recovers the amount from the buyer by giving him a bill in the name of his adat shop." After stating his opinion, the learned Member referred the six questions quoted in paragraph 1. He also mentioned a question which the State Government requested should also be referred but which the learned Member did not refer to the High Court for its opinion because the facts in the present case did not warrant the reference of that question. 6. The main controversy in this case is whether on the facts stated in the previous paragraph, the assessee can be said to have purchased the goods and then sold them to the Beparis for the purpose of the application of the definition to him. The definition of "dealer" in the Sales Tax Act is as follows :- "'dealer' means any person who, whether as principal or agent, carries on in Madhya Pradesh the business of selling or supplying goods, whether for commission, remuneration or otherwise and includes a firm, a partnership, a Hindu undivided family and the Central or a State Government or any of their departments and includes also a society, club or association selling or supplying goods to its members." It is contended by the State Government that the definition is wide enough to include the assessee who carries on the business of selling sarees to the Beparis after obtaining dominion over them, thereby becoming either an agent of a principal or a principal himself. 7. It is clear from entry No. 48 in List II of the Seventh Schedule to the Government of India Act, 1935, that tax is to be levied on a "sale of goods" and the authority of the Provincial Legislature extended to the imposition of the tax on any transaction of sale of goods. The tax is laid on a dealer under the Act and for this purpose the person sought to be taxed must carry on the business of selling goods, whether as principal or as an agent. Unless the assessee can be said to have carried on the business of selling the goods, whether as a principal or as an agent, the tax cannot be levied. Unless the assessee can be said to have carried on the business of selling the goods, whether as a principal or as an agent, the tax cannot be levied. It is clear that the entry does not entitle the Provincial Legislature to tax brokers who may have assisted at a sale but had not sold the goods either as principal or as agent. We need not consider in the present case whether the definition goes beyond the ambit of the entry because, in our opinion, the matter can be disposed of without deciding that question. 8. The description of the business transacted at the counter of the assessee may now be analysed. The assessee has his shop where he stocks sarees for sale to purchasers. He, however, affords the weavers an opportunity of exhibiting their sarees at his counter, so that prospective buyers may see the goods before they buy them. This does not involve a sale by the assessee. When the Beparis come to inspect the sarees and to negotiate the price, the negotiation is between the Bepari and the weaver, with the assessee assisting in the negotiations. The weaver, according to the analysis of the transaction, is present throughout. The fact that the assessee assists at the settlement of the price does not constitute him a seller on his own. When the price is settled, a chit is placed in the saree and the transaction is closed. Thereafter the weaver goes away and even if the Bepari were to change his mind, the weaver is not affected and the saree cannot be returned to the weaver. It is argued that this shows that the assessee has dominion over the goods and that the goods belong to him after the transaction is complete, and not to the weaver. It is inferred from this that the assessee deals with the goods as a principal or, at any rate, as a commission agent and thus indulges in the sale of goods for the purpose of the definition. The Board of Revenue in its previous cases had held that though a broker was not liable for sales tax on transactions arranged by him, a commission agent was not so exempt. Those cases are : Ramchandra Rampal v. The State ([1952] 3 S.T.C. 109) and Dinanath Mahadeo Dalal v. The State ([1952] 3 S.T.C. 107). The Board of Revenue in its previous cases had held that though a broker was not liable for sales tax on transactions arranged by him, a commission agent was not so exempt. Those cases are : Ramchandra Rampal v. The State ([1952] 3 S.T.C. 109) and Dinanath Mahadeo Dalal v. The State ([1952] 3 S.T.C. 107). See also Radhakrishna Rao v. The Province of Madras ([1952] 3 S.T.C. 121) and Public Prosecutor v. Thommaia Fernando ([1953] 4 S.T.C. 331). Hutton v. Lippert ((1883) 8 App. Cas. 309) involved facts other than those appearing here and in fact serves to distinguish the case of a broker, pure and simple, from a person who buys the property and sells it later on commission chargeable to the original vendor. Arguing on the basis of these cases the State Government urges that the assessee falls within the definition of a dealer and is liable to tax. 9. We must, however, see the extent to which his so-called dominion exists over the goods. This is clear from the remaining portion of the analysis made of facts. If the weaver does not agree to sell the saree at the price offered by the buyer, the weaver takes away his goods to another shop where he can show the goods to other Beparis. The saree belongs to the weaver and the assessee has no dominion over it till the transaction is over; otherwise the weaver could not take away his goods. Again, if after the weaver goes away the Bepari changes him mind, the weaver is not concerned because the transaction so far as he is concerned is over. This shows that the transaction of sale between the weaver and the Bepari is finally concluded when the broker, guaranteeing payment by the Bepari, puts a chit in the saree, and the weaver is not thereafter concerned with the transaction. In our opinion, the transaction must be viewed as a whole and the fact that the weaver does not take back the saree after the chit is put does not bring the transaction forward to a point later than the putting in of the chit by the assessee. The payment is received by the assessee from the Bepari on bills made in the name of his shop, and such bills include many transactions which the Bepari might have had with different weavers. 10. The payment is received by the assessee from the Bepari on bills made in the name of his shop, and such bills include many transactions which the Bepari might have had with different weavers. 10. It is argued by the State Government that the fact that the assessee prepares the bill in his own name shows that the transaction is his and not of the weaver. We do not agree. The transaction is over between the weaver and the Bepari after the chit is placed and it is the duty of the assessee to recover the price and to remit it to the weaver. He is not a commission agent for the weaver but is a broker who, having negotiated the transaction with a floating population of Beparis, is required to see that the money is either paid forthwith to the weaver or is collected by him later on and sent to the weaver. By the practice of the trade the collection and payment is made afterwards, but that does not make the broker a commission agent. The distinction between a broker and a commissioner agent was brought out by the Board of Revenue in Dinanath Mahadeo Dalal v. The State ([1952] 3 S.T.C. 107); See also the Madras case cited above. In Dinanath Dalal's case ([1952] 3 S.T.C. 107), the learned President observed as followed :- "In referring to transactions of the nature described in the preceding paragraph, it seems advisable to avoid the use of the expression 'commission agent'; because under section 2(c) of the Act, a 'person who ... as ...... agent, carries on ...... the business of selling or supplying goods ...... for commission ......' comes under the definition of 'dealer'. If the expression 'commission agent' is to be confined to a person just described, it should be clear that it cannot apply to a person like the appellant, if we are to go by such facts about him as can be elicited from the record. For, he does not carry on any business of selling or supplying goods; he is hardly more than an intermediary between the seller or supplier on the one hand and the buyer on the other. For the services he renders as such intermediary, he recovers his remuneration either from one or both of the parties. For, he does not carry on any business of selling or supplying goods; he is hardly more than an intermediary between the seller or supplier on the one hand and the buyer on the other. For the services he renders as such intermediary, he recovers his remuneration either from one or both of the parties. To distinguish him from the 'commission agent' included in the definition in section 2(c), he could perhaps be simply called as a broker and his remuneration as brokerage. At any rate, the view urged by counsel on both sides that a person, acting as a broker and recovering only his brokerage, is not a dealer is correct." This distinction is borne out by a reference to Stroud's Judicial Dictionary. The meaning of a broker is :- "'Brokers are those that contrive, make, and conclude bargains and contracts between merchants and tradesmen, in matters of money and merchandise, for which they have a fee or reward' (Jacob, cited by Best C.J., Gibbons v. Rule (4 Bing. 306)." The distinction between the two is that a commission agent, having control over the goods, sells them to others. Though he may act for a disclosed principal at either end, he negotiates the sale with the purchaser on his own. The broker does not sell the goods on his own, but merely brings the vendor and the vendee together and settles the price. Bearing in mind the facts in the present case and considering the making of the bills by the assessee in his name according to the practice of the trade, we are opinion that the assessee belongs to the category of brokers rather than commission agents who stock goods from sellers for sale on their own behalf to purchasers, charging commission either one way or both ways. 11. It was argued that in some cases the Bepari is charged for packing, freight, etc., in the bills. That does not show that the goods belong to the assessee. This is a payment for services rendered after the transaction of sale is over. 12. 11. It was argued that in some cases the Bepari is charged for packing, freight, etc., in the bills. That does not show that the goods belong to the assessee. This is a payment for services rendered after the transaction of sale is over. 12. We are now in a position to answer the questions which have been posed for our decision and we give our answers thereto as follows :- Question 1 :- No. The assessee acts as a broker and is not included in the definition of a "dealer" under section 2(c) of the Act : See C.P. Coal Trading and Distributing Co. v. Commissioner of Sales Tax ([1954] 5 S.T.C. 208; I.L.R. 1954 Nag. 355). Question 2 :- Yes. The contract is between the weaver and the Bepari, with the assessee acting as an intermediary. Question 3 :- No. The assessee does not acquire possession and control over the goods at any stage till the closure of the deal. The goods remain the property of the weaver who, if the transaction fell though, is entitled to take them away. If loss occurred in the presence of the weaver, the loss undoubtedly would fall on the weaver and not on the assessee, unless he could be said to be a bailee for the weaver, which we cannot say would be the case if the weaver put the goods at his counter and remained present for displaying the goods on his own behalf to the prospective buyers. Question 4 :- The answer to the first part is "No" and the answer to the second part is "Yes". We agree substantially with the reasons given by the Board of Revenue and hold that the assessee acts as a broker throughout the transaction, and not as a dealer selling goods either for himself or as agent of the weavers. Question 5 :- This question involves consideration whether a broker is included within the definition of a "dealer" and if it is, whether the definition is ultra vires the Provincial Legislature. This question need not be answered since the definition of a "dealer" does not include a broker. Question 6 :- This question also does not need any answer in view of our opinion on questions (1) to (4). 13. A copy of this judgment shall be sent to the Board of Revenue. 14. There shall be no order about costs. This question need not be answered since the definition of a "dealer" does not include a broker. Question 6 :- This question also does not need any answer in view of our opinion on questions (1) to (4). 13. A copy of this judgment shall be sent to the Board of Revenue. 14. There shall be no order about costs. Reference answered accordingly.