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TMI Blog1963 (11) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... -13, which included the sum of Rs. 74,205-46 being the purchase value of wattle bark and other dyeing and tanning materials. The petitioners contended that they were not dealers in tanning materials and that they would not, therefore, be assessable to tax. This contention was not accepted by the taxing officer, and there was an appeal to the Appellate Assistant Commissioner. The same contention was reiterated but without success. The appellate authority held that the purchase of tanning materials by a tanner like the petitioners is in the course of business and that the definition of "dealer" under section 2(g) of the Act was satisfied. The assessment was confirmed and the appeal was dismissed. There was a further appeal to the Sales Tax Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, commerce or manufacture, whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern." This is an inclusive definition phrased with the object of bringing in several activities which may not ordinarily be comprehended within the meaning of the expression "business". The first Schedule to the Act prescribes a list of goods in respect of which tax is leviable at a single point in accordance with section 3, sub-section (2). Entry 59 relates to the single point levy regarding tanning materials. That reads: "Wattle bark, Avaram bark, Konnam bark, Wattle extract, Quobracho and Chestnut extract." Tax is payable at the rate of 3 per cent. at the point of last purchase in the State. Rule 5(2) of the Madras Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of profit motive does not mean that a business is not being carried on. Lord Coleridge, C. J., observed in Inland Revenue Commissioners v. Incorporated Council of Law Reporting[1888] 3 Tax Cas. 105 at 113.: "It is not essential to the carrying on of trade that the people carrying it on should make a profit.......... or wish to make a profit." That question does not, however, arise in this case, as it is not denied by the petitioners that a profit motive is present. Now, who is a "dealer" within the Act? He is a person who carries on the business of buying, selling, etc. for cash or for deferred payment or for commission or remuneration. Any person who is engaged in the activity of buying, selling or supplying or distributing, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lords in Governors of Rotunda Hospital v. Coman [1918-20] 7 Tax Cas. 517. In Religious Tract and Book Society v. Forbes [1896] 3 Tax Cas. 415. and Royal Agricultural Society of England v. Wilson[1924] 9 Tax Cas. 62., the profit arose from a subordinate activity carried on to assist in the attainment of the main objective which was "charitable" in the legal sense of that word. But yet, the taxing authorities treated the income as business income. The carrying on of a tannery by the petitioners is undoubtedly carrying on of a business. It cannot be said to be a mere occupation or profession. The course of business consists of tanning goods for remuneration or charges. In order to carry on that business, it was essential for the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners relies upon the following observation in that judgment in support of their contention: "In so far as the definition is concerned, the buying of the goods must be in the course of business, which decisions have interpreted to mean that it should be associated with the profit motive. It does not appear to be necessary that having bought goods the dealer should sell them as such. It may be that the dealer in engaged in the production of goods in the course of which the goods which he purchased are utilised and converted into other goods or are necessary ingredients in the manufacture of the goods sold. It seems difficult to see why the purchase should be deemed to be devoid of the profit motive in an integrated transaction of that natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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