M/S. CHOWRINGHEE SALES BUREAU (P) LTD. vs C.I.T., WEST BENGAL

The Supreme Court held that the definition of 'Dealer' in Explanation 2 of Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941, is not ultra vires the State legislature's powers under Entry 48, List II of the Government of India Act, 1935. The Court ruled that an auction sale constitutes a sale under the Sale of Goods Act, and the imposition of sales tax on auctioneers is permissible as it directly relates to the transaction of sale. Consequently, the amount collected as sales tax by the appellant was deemed part of its income and subject to taxation under the Income Tax Act.