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TMI Blog1972 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) canteen sales, (3) sale of scrap, and (4) penalty, have to be considered, while in Appeal No. 2120 of 1969 only the sales tax levied in respect of sale of scrap and penalty has been challenged. The respondents are oil companies and it appears in the first of the appeals the respondent under the Factories Act had to supply tea and edibles to its workmen for the canteen established by it. It also supplies to its agents at cost price or less than the cost price advertisement materials such as calendars, purses and key chains. Both the respondents also sell as scrap periodically unserviceable oil drums, rubber hoses, jerry cans, rims, unserviceable pipe fittings and old furniture. The amount of turnover in respect of each of the items in the respective appeals is not relevant, but what is relevant is that in both the appeals the year 1964-65 for which assessment is made on the turnover of sales is divided into two parts: (i) 1st April to 31st August, 1964, and (ii) 1st September, 1964, to 31st March, 1965, the first part being governed by the 1959 Act while the second part is chargeable under the Act after its amendment in 1964. The definition of business, casual trader and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure or concern is carried on or concern;" with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern;" (e) " 'casual trader' means a person (e) " 'casual trader' means a who has, whether as principal, agent, person who has, whether as or in any other capacity, occasional principal, agent, or in any other transactions of a business nature capacity, occasional transactions of a involving the buying, selling, supply business nature involving the or distribution of goods in the State, buying, selling, supply or distributor whether for cash, or for deferred of goods in the State, whether payment, or for commission, for cash, or for deferred payment, or remuneration, or other valuable for commission, remuneration, or consideration;" other valuable consideration, and who does not reside or has no fixed place of business within the State;" (g) " 'dealer' means any person (g) " 'dealer' means any person who carries on the business of who carries on the business of buying, buying, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention to carry on business of selling any particular class of goods. Undoubtedly from the frequency, volume, continuity and regularity of transactions carried on with a profit-motive, an inference that it was intended to carry on business in the commodity may arise. But it does not arise merely because the price received by sale of discarded goods enters the accounts of the trader and may on an overall view enhance his total profit, or indirectly reduce the costs of production of goods in the business of selling in which he is engaged. An attempt to realize price by sale of surplus unserviceable or discarded goods does not necessarily lead to an inference that business is intended to be carried on in those goods, and the fact that unserviceable goods are sold and not stored so that badly needed space is available for the business of the assessee also does not lead to the inference that business is intended to be carried on in selling those goods." The contention on behalf of the State in respect of the first part of the turnover for 1964-65 therefore fails. With respect to the second part of the turnover the question whether the amendments in 1964 to the definition of "business" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccrued to it and it was, therefore, with reference to the fair price shop, not a dealer within the meaning of the Act. This decision does not take note of the word "such" in the second sub-clause, which, in our view, imports by reference the definition in sub-clause (i) into that of sub-clause (ii). A similar question came up for consideration before the Andhra Pradesh High Court on the analogous provisions of the Andhra Pradesh General Sales Tax Act in Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1972] 30 S.T.C. 26. In that case, the assessee-company maintained a canteen for the use of workers in compliance with the provisions of the Factories Act, 1948, and the Rules made thereunder. The question was, whether the turnover relating to the supplies of food and drink to the workers at the canteen could be charged to sales tax under the Andhra Pradesh General Sales Tax Act, 1957. The assessee contended that it was compelled by statute to provide and maintain a canteen for use of workers, that the canteen was not run with a profit-motive, as such it could not be said that there were any sales when food and drink were supplied to the workers at the canteen and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently a seller of scrapped vehicles and other scrap was not liable to be assessed. It was pointed out at the very outset that in view of the pronouncements of the Supreme Court, the A. P. State Road Transport Corporation which is primarily constituted to provide an efficient, adequate, economical and properly co-ordinate system of road transport service could not be held to be a dealer carrying on the business in old and scrapped vehicles and other scrap and it could not be assessed to sales tax. The Commercial Tax Officer was not, therefore, right in holding that the assessee-corporation was a dealer. The chargeable section, viz., section 3, makes every dealer liable to pay tax in respect of the turnover for the year and consequently the assessee not being a dealer cannot be assessed to tax under the Act. The sale of scrap in these appeals, which as we have said earlier, consisted of spoiled drums, hose pipes, etc., were all held to be connected with the business of the company. This finding is a finding of fact but even otherwise the very nature of the particular scrap prima facie would indicate that they are connected with the business of the company. The assessee be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of the company and the turnover in respect of this commodity is liable to tax. It cannot also be said that the turnover in respect of the sale of the assessee's advertisement materials at cost price or less than cost price is not connected with the business of the assessee. Calendars, wallets and key chains are all given by the dealers to its customers for purposes of maintaining and increasing the sales of the products of the assessee and is therefore connected with the business. What the assessee is doing is to facilitate the dealers to acquire at their cost such advertising materials of a uniform type approved by the assessee-company which, instead of allowing each of them to have these separately printed or manufactured, itself undertook to do so and supplied them to its dealers. The supply of such material is in our view being connected with the business is liable to be included in the turnover of the assessee. It is pointed out by the learned Advocate for the respondent in the first of the appeals that under G. O. 2238 dated 1st September, 1964, the canteen sales are exempt and notwithstanding the fact that the assessee in that appeal has complied with the terms ..... X X X X Extracts X X X X X X X X Extracts X X X X
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