1. This is an appeal from a decision of Mr. Justice Shelat in Miscellaneous Petition No. 232 of 1958. The relevant facts are as follows :-
Prior to the 23rd of May, 1957, one Tolaram Assanmal, the father of the appellant, was carrying on business at Colaba, Bombay, in the name and style of Tolaram's. He died on the 23rd of May, 1957. It is common ground that even during the lifetime of his father, the appellant was managing the business of Tolaram's. On the 31st of October, 1953, the Sales Tax Officer, 'A' Ward, Bombay, served a notice in Form XXXIV under the Bombay Sales Tax Act, 1953, on the appellant saying that he wished to satisfy himself that the returns filed by the firm in respect of the quarter ending 31st March, 1953, were correct and complete, and asked the firm to produce evidence in support of those returns. In compliance with the notice the appellant produced the required evidence. It would appear that subsequent to this the Sales Tax Officer, Enforcement Branch, seized certain account books belonging to the appellant. On 7th April, 1958, he passed an order of retention of those books for the purpose of verification. On the 12th of March, 1958, the Sales Tax Officer issued a notice in Form XIV to the appellant under section 15 of the Sales Tax Act. The notice stated as follows :- 'Whereas I am satisfied that your turnover in respect of the sales amounting to Rs. 1,00,000 for the period from 1st November, 1952 to 31st March, 1953, has escaped assessment for general tax, you are hereby directed to attend in person or by a legal practitioner or by an agent authorised in writing at the above address at 11 a.m. on 31st March, 1958, and to show cause ....... etc.'
2. A similar notice under the same date and in the same Form was also served on the firm of Tolaram's in respect of the special tax for the same period. Two other notices under the same date were also served both for general and special taxes for the period between 1st of April, 1953, and 31st of March, 1954. All these notices together with the covering letter dated the 13th of March, 1958, were served on the appellant at the business premises of M/s. Tolaram's. According to the appellant, the Sales Tax Officer had no authority to issue these notices. He, therefore, preferred a petition before this Court challenging the validity of the action taken by the Sales Tax Officer.
3. The matter was heard by Mr. Justice Shelat. It was urged before the learned Judge that the Sales Tax Officer was justified in serving these notices on the appellant, firstly, because he was the heir of the deceased Tolaram and secondly, because he was the manager of the business of Tolaram's even during the lifetime of his father and is so subsequent to the death of his father. It was also argued before the learned Judge that the appellant by his conduct had held himself out as the dealer and consequently he is now estopped from contending that he is not a 'dealer' as defined in the Act. The learned Judge negatived the contention of the Sales Tax Officer that the appellant being the heir of the deceased Tolaram could be proceeded against by the department in respect of escaped assessment for a period during which his father was alive. He, however, held that the appellant not only held himself out as a 'dealer' as defined in the Act but being the manager of the business of Tolaram's even during the lifetime of his father and particularly during the period in question, the Sales Tax Officer was justified in issuing a notice against him. The learned Judge also held that the appellant had held himself out as a 'dealer' by making certain applications under the Bombay Sales Tax Act, and therefore, it did not lie in his mouth now to say that he is not a 'dealer'.
4. We would like to point out at the outset that the learned Advocate-General who appears for the Sales Tax Officer frankly stated that the view taken by the learned Judge that the appellant cannot be said to be a 'dealer' merely because he had succeeded to the interest of his father after the demise of his father is correct and that the Sales Tax Officer was not entitled to issue a notice against him only upon the ground that he had succeeded to his father's interest in the firm of M/s. Tolaram's after his death. In view of this concession we need not say anything whatsoever on this point.
5. The question then is whether the appellant can be said to be a 'dealer' as defined in the Act. The definition of 'dealer' is contained in sub-section (7) of section 2 of the Sales Tax Act, 1952, which runs thus -
'(7) 'dealer' means any person who carries on the business of selling goods in the State of Bombay, whether for commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells goods to its members;
Explanation. - The manager or agent of a dealer who resides outside the State of Bombay and carries on the business of selling goods in the State of Bombay shall, in respect of such business, be deemed to be a dealer for the purposes of this Act.'
6. According to the learned Advocate-General we must give their due meaning to the words 'whether for commission, remuneration or otherwise' which occur in the definition. Because of the presence of these words we cannot, according to him, read the words 'carries on the business' occurring in the section as meaning 'carrying on his own business'. If that were accepted, according to him, a person who is managing the business of another of selling goods shall be deemed to be a 'dealer' within the definition. It seems to us that would not be the correct way of reading the section. A person, under the definition, can be regarded as a 'dealer' provided he is carrying on his own business of selling goods. It may be that he may be selling somebody else's goods but the business which he carries on must be his own in order that such a person would fall within the definition of a dealer. The fact that such a person would be receiving commission or remuneration for selling somebody else's goods would not make any difference. A person who manages the business of another even though in the course of that business he has to sell his goods cannot be said to be carrying on the business of selling goods. What he does is to manage the business of someone else though this activity may involve the selling of goods, and nothing more. Indeed, if a manager or an agent could be said to have been included in the definition, then there was no point in adding the Explanation to that definition. The very fact that the Legislature enacted this Explanation for including manager or an agent within the definition of a 'dealer' in certain circumstances makes it clear that the Legislature did not intend to include either a manager or an agent in the main definition of 'dealer' contained in the section.
7. The learned single Judge took the view that the appellant must be deemed to be a dealer because he was managing the business on behalf of his father who was a resident out of the State of Bombay and that, therefore, the 'Explanation' includes him. It is sufficient to say that there is not material on the record from which it could be inferred that during the relevant period the appellant's father, Tolaram, was not resident in the State of Bombay. On the other hand, from certain statements appearing in the judgment of the learned Judge it could be inferred that the appellant's father had not left India till the end of the year 1955. It was in December, 1955, or so that the appellant's father left India and went to the Phillipines and eventually died there in the year 1957. From these facts it cannot obviously be concluded that the appellant's father was resident outside the State of Bombay at the relevant time. It is an admitted fact that the appellant's father was a registered dealer under the Act. It is, therefore, against him that a process could be issued under the Act. When the Sales Tax Officer instead of issuing a process against him issued a process against someone else, it was necessary for the Sales Tax Officer to show that he had power to issue a process against that person. It is contended before us on behalf of the Sales Tax Officer that since the appellant was managing the business of his father and since his father was not resident in Bombay, the appellant could be regarded as a 'dealer'. Before regarding him as a 'dealer', the department must establish that the appellant's father was not resident in the State of Bombay at the relevant time. In the absence of any evidence to show that the appellant's father was resident outside the State of Bombay at the relevant time, we must hold that the appellant cannot be regarded as a 'dealer' by taking the aid of 'Explanation' to the definition.
8. Mr. Advani, who appears for the appellant, also urged that even assuming that for certain purposes the appellant could be regarded as a 'dealer', the Sales Tax Officer had no power to issue a notice against him under section 15 of the Act. In this connection he referred us to the provisions of that section; the relevant portion is -
'15(1). If in consequence of any information which has come into his possession ........ the Collector may in any case where he has reason to believe that the dealer has concealed the particulars of such sales or has knowingly furnished incorrect returns, ...... serve on the dealer liable to pay the tax in respect of such turnover a notice, etc.'.
9. Now, Mr. Advani points out that it is only on a dealer who is liable to pay tax that a notice can be served by the Sales Tax Officer. The he referred us to the relevant provisions of the Act for ascertaining the person who is liable to pay the tax. Section 5 of the Act provides that every dealer whose turnover exceeds Rs. 30,000 shall be liable to pay the general tax at a certain rate. Section 6 specifies the rates at which such a tax is to be levied. Section 11 deals with the taxable turnover for the purposes of special tax. Section 12 imposes a duty upon a dealer to obtain a licence prescribed by the Act. Section 13 imposes a liability upon the dealer to furnish returns from time to time. Section 14 empowers the Sales Tax Department to assess tax upon a dealer. And section 15 deals with turnover escaping assessment. Now, considering all these sections together it would follow that only a 'registered dealer' is liable to pay the taxes under the Sales Tax Act. Of course, it does not follow from this that if a person wrongly refused to register himself as a dealer he can escape the liability to pay the tax. But what follows from this is that it is the person who is a registered dealer or who is liable to be registered as a dealer that is liable to pay the tax. Here it is an accepted fact that the appellant's father, Tolaram, was a registered dealer. In the circumstances, it was he who was liable to pay the tax. That being the position, we are of the opinion, that a notice under section 15 could have been issued against him and him alone. Since he died on the 23rd of September, 1957, no notice under section 15 could be issued to anyone in respect of the turnover which has escaped assessment. For both these reasons, we hold that the notices issued by the Sales Tax Officer are bad in law and are quashed.
10. Upon the view we have taken, we do not want to say anything regarding the point of limitation urged before us by Mr. Advani.
11. We allow the appeal, set aside the order of the learned single Judge and direct that a writ of mandamus be issued against the respondents restraining them from proceeding against the appellant on the basis of the notices issued by the Sales Tax officer. Costs of the appeal and the petition will follow the event. So far as the appeal is concerned there will be ordinary taxed costs and so far as the costs in the Court below are concerned the respondents shall pay Rs. 250 to the appellant.
12. Liberty to the appellant to withdraw the amount of Rs. 300 deposited in Court.
13. Appeal allowed.