JUDGMENT The judgment of the Court was delivered by DR. B. P. SARAF, J. - By these three references under section 61(1) of the Bombay Sales Tax Act, 1959, arising out of a common order of the Tribunal in appeals for three years in the case of the same assessee, the Maharashtra Sales Tax Tribunal has referred the following question of law to this Court for opinion at the instance of the Revenue : "Whether, on the facts and in the circumstances of this case, the Tribunal was right in holding that the appropriation of the principal's goods by the assessee to himself, as represented by the debit entries in the 'Shah account', did not constitute a sale of goods at the hands of the assessee ?" 2. The assessee, M/s. Paragji Mulji & Co., is a partnership firm engaged in the business of buying and selling goods. It is also registered as a dealer under the Bombay Sales Tax Act, 1959. The assessee also acts as agent of principals to sell their products for a commission, the practice followed in this regard being that the principals send their goods to the assessee as their agent with instructions to sell the same. The assessee also carried on the business of selling similar goods of its own. So far as the goods belonging to the principals are concerned, the assessee used to keep them separately and sell the same from time to time to various parties in accordance with the instructions of the principals and credit the sale proceeds to the principals' accounts. Some times, such goods belonging to the principals were purchased by the assessee himself. This was done by debiting a goods account termed as "Shah account" and crediting the account of the principal for the price of the goods determined at the prevailing market rates. The value of the goods so credited to the principal's account was thereafter remitted to the principal. When goods were ultimately sold by the assessee, "Shah account" was credited and the customer account was debited for actual sale price. At the end of the year, the profits or losses arising to the assessee from purchase and sale of goods recorded in the Shah account were transferred to its profit and loss account. 3. When goods were ultimately sold by the assessee, "Shah account" was credited and the customer account was debited for actual sale price. At the end of the year, the profits or losses arising to the assessee from purchase and sale of goods recorded in the Shah account were transferred to its profit and loss account. 3. In its orders of assessments for the periods from January 1, 1960 to March 31, 1960, April 1, 1960 to March 31, 1961 and April 1, 1961 to March 31, 1962, the Sales Tax Officer excluded the value of the goods belonging to its principals appropriated by the assessee by debiting the same to "Shah account" as, according to him, it did not represent sale of the goods in question. Subsequently, the Assistant Commissioner of Taxes initiated suo motu revision proceedings and held that the amount in question represented the sale price of the goods belonging to the principals on which sales tax was leviable. Against this revisional order, the assessee appealed to the Deputy Commissioner of Sales Tax who rejected the appeal and confirmed the order passed on revision by the Assistant Commissioner. The assessee thereafter filed revision applications before the Maharashtra Sales Tax Tribunal ("the Tribunal"). The contention of the assessee before the Tribunal was that the appropriation of the goods of the principals by the assessee, who was acting as their agent, could not be regarded as "sale" because a person cannot sell goods to himself. The case of the Revenue, on the other hand, was that the assessee was acting in a dual capacity and hence purchase of goods of the principals by him resulted in sale of goods. The above contention of the Revenue did not find favour with the Tribunal. The Tribunal accepted the contention of the assessee and held that appropriation of the goods of the principal by the assessee did not amount to sale. The Tribunal, therefore, set aside the order of the Assistant Commissioner of Taxes passed on revision and restored the order of the Sales Tax Officer. Hence this reference at the instance of the Commissioner of Sales Tax. 4. We have heard the counsel for the parties. The learned counsel for the Revenue submits that the Tribunal committed a manifest error of law in holding that the appropriation of goods belonging to the principal by the agent did not amount to sale. Hence this reference at the instance of the Commissioner of Sales Tax. 4. We have heard the counsel for the parties. The learned counsel for the Revenue submits that the Tribunal committed a manifest error of law in holding that the appropriation of goods belonging to the principal by the agent did not amount to sale. According to him, the moment the goods were appropriated by the assessee and the price thereof credited to the account of the principal, there was transfer of property in the goods from the principal to the assessee for monetary consideration. According to the counsel for the assessee, an agent cannot himself purchase the goods belonging to his principal. 5. We have carefully considered the rival submissions in the light of the facts of the case. The word "sale" has been defined in clause (28) of section 2 of the Act to mean a sale of goods made within the State for cash or deferred payment or other valuable consideration. In the instant case there is no dispute about the fact that the goods in question belonged to the principal of the assessee; the assessee was his agent to sell the same. He was holding the goods in his capacity as an agent and was obliged to sell the same and to remit the proceeds thereof to the principal for which he was entitled to get a commission at the stipulated rate. There is no dispute also about the fact that the assessee was also dealing in similar goods belonging to himself. He was engaged in the purchase and sale of the same on his own account. As agent of the principal, he was entitled to sell the goods belonging to the principal and pass good title to the purchaser. Instead of selling the same to third parties, he purchased the goods himself by debiting the goods account (named "Shah account") in his books and crediting the account of the principal for the price of the same. The moment this was done, the sale of the goods of the principal was complete and the title therein got vested in the assessee in his independent capacity. He no more remained an agent or trustee of the principal in respect of goods but became a debtor of the principal in respect of the sale price thereof. The moment this was done, the sale of the goods of the principal was complete and the title therein got vested in the assessee in his independent capacity. He no more remained an agent or trustee of the principal in respect of goods but became a debtor of the principal in respect of the sale price thereof. He thus acted in a dual capacity and there is nothing wrong in that. A person may act as an agent of a principal and may also carry on business of his own. In such a case, he holds two different capacities, one as an agent of the principal and the other as proprietor of his own business. He thus acts as two different legal entities. When he transfers the goods belonging to his principal to himself, he acts not only as an agent of the principal but also as proprietor of his own business. On such transfer, he ceases to be a trustee of the principal and becomes a debtor for the sale price thereof. There is nothing wrong or illegal in his dual capacity coming into play in such transactions. Such transactions clearly fall within the definition of "sale". 6. Otherwise also we do not find any illegality in the purchase of the goods of the principal by the agent himself. Though ordinarily an agent cannot buy the principal's property himself, such purchases are not illegal or prohibited. An agent need not act merely an agent to sell. He may also have a right to enact himself as a purchaser. Whether such a right is conferred on an agent or not will depend in each case upon the terms of the agreement, express or implied. That, however, is a matter between the principal and the agent. In the case before us, there is no controversy about the fact that some of the goods of the principal were in fact purchased by the assessee himself for consideration and no objection was taken by the principal to such purchases. Under the circumstances, the inference is obvious that the assessee, who was an agent, had also been given the right to purchase the principal's goods himself. In such a case, it is difficult to hold that there was no sale within the meaning of section 2(28) of the Act. All the ingredients of the sale are present. Under the circumstances, the inference is obvious that the assessee, who was an agent, had also been given the right to purchase the principal's goods himself. In such a case, it is difficult to hold that there was no sale within the meaning of section 2(28) of the Act. All the ingredients of the sale are present. The transaction was between two persons - one, the assessee in his individual capacity and the other, the principal represented by the assessee as his agent. The assessee acted in a dual capacity in this case. This is therefore, a clear sale of the goods belonging to the principal and the assessee was liable to pay sales tax thereon as agent of the principal. 7. We are supported in our above conclusion by a decision of the Madras High Court in Chandramouli and Company v. State of Madras [1966] 18 STC 325. In that case, the assessee, a local agent of a non-resident principal and carrying on a business of his own, transferred the goods of his principal to his own business and collected commission from his principal on the transaction. It was contended by the assessee in the above case that the transaction did not involve any sale inasmuch as the same person cannot sell the goods to himself. When the matter reached the High Court, the Madras High Court held that the assessee had two different capacities and when he transferred the goods to himself, he not only acted in that transaction as the agent of his non-resident principal, but also as a purchaser. There is nothing wrong in this dual capacity coming into play in the transaction which is clearly within the definition of "sale". We are also supported in our above conclusion by a decision of the Orissa High Court in Nestle's Products (India) Limited v. State of Orissa [1974] 33 STC 356. In that case, it was held that the agent of the assessee had physical custody of the goods and by authority of agency he was entitled to pass on good title to any purchaser. In that case, it was held that the agent of the assessee had physical custody of the goods and by authority of agency he was entitled to pass on good title to any purchaser. If instead of selling the goods to the outsiders, the agent sold the goods to himself by appropriating the goods owned by the principal and claiming commission by making entries in his book, there was a transfer of title from the principal represented by the agent to a dealer (the agent in his independent capacity). 8. In view of the above, we are of the clear opinion that the Tribunal was not right in holding that the appropriation of the principal's goods by the agent to himself did not constitute sale of goods. In view of the above, we answer the question in the negative and in favour of the Revenue. In the facts and circumstances of the case, there shall be no order as to costs. Reference answered in the negative.