1962 (4) TMI 77 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner can be assessed for sales tax on two bronze casts made and supplied.
2. Whether the transactions amount to works contract not involving taxable sale.
3. Whether the petitioner qualifies as a dealer under the Madras General Sales Tax Act, 1939.
4. Whether the transactions can be considered sales in the course of trade or business.

Analysis:
1. The petitioner sought relief from being assessed for sales tax on two bronze casts made and supplied to the Government of West Bengal and Madras. The Deputy Commercial Tax Officer considered the transactions as liable to sales tax due to their market value, treating them as marketable goods. The petitioner contended that the transactions were not sales but works contracts not subject to tax.

2. The petitioner, a renowned sculptor, argued that he was not a dealer as defined by the Act and the transactions were not sales but works of art. The bronze casts, "Triumph of Labour" and Mahatma Gandhi, were unique pieces valued for their artistic quality rather than material worth. The petitioner's intention was to create objects of special art for admirers, not for commercial trade.

3. The definition of a dealer under the Madras General Sales Tax Act, 1939, requires the person to engage in buying, selling, supplying, or distributing goods in a commercial sense. The court emphasized that sales tax applies only to transactions conducted in the course of trade or business. The petitioner's artistic creations did not align with the commercial nature essential for being classified as a dealer.

4. The court applied tests to determine if the transactions qualified as sales in the course of trade or business. It considered whether the items had a general market or were valuable only to specific buyers. The bronze casts, being unique works of art with no general market, did not meet the criteria for sales taxable under the Act. The court concluded that the petitioner was not a dealer, and the transactions did not constitute sales subject to sales tax.

Conclusion:
The court allowed the petition, ruling in favor of the petitioner and making the rule nisi absolute. The judgment highlighted that the transactions involving the bronze casts were not sales in the course of trade or business, and the petitioner was not liable to be assessed for sales tax. The court's decision emphasized the artistic nature of the petitioner's creations, distinguishing them from commercial transactions subject to taxation under the Act.