1982 (2) TMI 278 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the sale of storage tanks by the assessee constituted a transaction of "business" under section 2(4)(ii) of the Gujarat Sales Tax Act, 1969.
2. Whether the assessee could be considered a "dealer" under section 2(10) of the Gujarat Sales Tax Act, 1969, in relation to the sale of storage tanks.

Issue-Wise Detailed Analysis:

Issue 1: Definition of "Business" under Section 2(4)(ii)
The primary question was whether the sale of storage tanks by the assessee constituted a transaction of "business" as defined under section 2(4)(ii) of the Gujarat Sales Tax Act, 1969. The Tribunal had held that the sale of storage tanks was a business transaction because it was ancillary or incidental to the assessee's principal trade of dealing in light diesel oil, lubricant oil, and kerosene. The court examined the statutory definition of "business," which includes "any transaction of buying, selling or supplying plant, machinery, raw materials, processing materials, packing materials, empties, consumable stores, waste products, or such other goods, or waste or scrap of any of them which is ancillary or incidental to or resulting from such trade, commerce, manufacture, adventure or concern."

The court noted that the storage tanks were used to store oil, which was essential for the assessee's business. Therefore, the sale of these tanks, whether because they were unserviceable or because the assessee found a better storage method, was incidental to the business. The court emphasized that the statutory definitions were clear and unambiguous, and the sale of storage tanks fell within the scope of "business" as defined by the Act.

Issue 2: Definition of "Dealer" under Section 2(10)
The second issue was whether the assessee could be considered a "dealer" under section 2(10) of the Gujarat Sales Tax Act, 1969, in relation to the sale of storage tanks. The Tribunal had concluded that the assessee was a dealer because the sale of storage tanks was in connection with the business. The statutory definition of "dealer" includes "any person who buys or sells goods in connection with his business."

The court found that the assessee, who was dealing in kerosene, light diesel oil, etc., needed storage tanks to carry on the business. The sale of these tanks, therefore, was in connection with the business, making the assessee a dealer under the Act. The court dismissed the argument that the sale was a casual transaction and not connected to the business. It held that the sale of storage tanks was clearly a business transaction, and the assessee was selling goods in connection with his business.

Conclusion:
The court upheld the Tribunal's decision, concluding that the sale of storage tanks was a business transaction under section 2(4)(ii) and that the assessee was a dealer under section 2(10) of the Gujarat Sales Tax Act, 1969. The court found no ambiguity in the statutory definitions and dismissed the assessee's appeal. The questions referred were answered against the assessee and in favor of the State, with no order as to costs.