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TMI Blog1956 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... f preparing bricks which could be used for the construc- tion of the buildings and therefore they set up a brick factory in 1946, and also for a similar purpose they set up lime kilns in 1948. They found that the price of brick was Rs. 48 per thousand in the market and by reason of setting up this brick factory and lime kilns the cost of bricks to them was only Rs. 38 per thousand. They supplied these bricks to their contractors, Messrs. Gannon Dunkerley Co. They manufactured more bricks than were actually necessary for their own construction work and there was a surplus and it is found as a fact that there was a danger of these bricks deteriorating and therefore they had to be disposed of, and they were disposed of from time to time either to sister educational institutions and in some cases also to individuals. But they were disposed of at cost price and no profit whatever was made by the society. The society also obtained a permit from Government to import steel, again for the purpose of their build- ings, and after the steel had arrived the Government gave them a permit to buy steel locally, with the result that the society did not require the steel which had been imported an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to tax business people who did the business of selling various commodities which were made liable to tax. For instance, section 8 prevents a person from carrying on business, who would be a dealer within the meaning of the definition, unless he got himself registered as such, and the consequence of a dealer carrying on business without registration is serious, because he renders himself liable to penal consequences as provided in section 24. Therefore, the expres- sion "carrying on business" must be given a restricted meaning. The Advocate-General drew our attention to the definition in Webster's Dictionary and in Murray's Oxford Dictionary and he asked us to construe the expression in its plain natural English meaning, and according to him all that was required in order to carry on the business of selling or supplying was for a person continuously to sell or supply goods, and according to him the only distinction between an activity which was a business activity and an activity which was not a business activity was that whereas the latter was undertaken for pleasure or as a pastime, the former was a serious activity. Therefore the Advocate-General contends that if in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or supplying goods. A further indication is given as to the nature of the activity by the Legislature including in this definition any society, club or association which sells or supplies goods to its members. The Legislature realised that a club or society does not carry on the business of supplying goods to its members, its business is to give amenities, to provide a place where people can spend their leisure hours, and realising that a society, club or association would not come within the definition, the Legislature had to extend the definition of a dealer and include in that definition a society, club or association. If that be the proper construction of the expression "carrying on the business of selling or supplying goods" used in this Act, let us see whether the activity of the society satisfies that definition. Shorn of its technicalities the position really is very simple. The society wishes to put up buildings, it employs a contractor, the buildings cannot be put up without bricks, and bricks have to be purchased for the construction of the buildings. The society realises that if the contractor were to go into the market and buy the bricks it would cost him and ultim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that the sole object of the society was to make bricks for their own buildings and for various reasons a larger quantity was produced, that quantity was liable to deteriorate, and therefore they had to be disposed of, and the important fact which cannot be overlooked is that these bricks were disposed of without the society making any profit whatsoever. We will presently deal with the profit motive and we are not looking at the absence of the profit motive from the point of view of the definition, but it is an important circumstance which can be taken into consideration in determining what the object of the society was in manufacturing these bricks. If the object was to sell, then it is impossible to understand why they were sold at cost price when the market price was Rs. 48 per thousand and they could easily have made a profit. The same is the position with regard to the steel and there the position is even stronger than in the case of the bricks, because the steel was ordered from Belgium for the needs of the society and it had to be disposed of at the direction of the Controller of Steel. When the steel was ordered, nothing was further from the mind of the society tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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