9911796707
TMI Blog1969 (12) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the assessment year 1960-61. In fact, in the course of assessment proceedings under the Central Sales Tax Act, 1956, the above turnover was noticed and hence a part of it was subject to the minimum rate of 1 per cent. and the other part at the optimum rate of 7 per cent. (which were the prevailing rates of tax during the assessment year 1960-61, the year with which the case is concerned) due to the nonavailability or defective 'C' forms produced by the mills before the assessing authority. As against the order of the assessing authority bringing to tax the above turnover, an appeal before the Appellate Assistant Commissioner was unsuccessful. The mills, however, produced a break-up statement of the turnover relating to the sales in question before the Appellate Assistant Commissioner. The appellate authority observed that they were not casual sales and in fact certain sales were of workshop material consisting of angles made to the specification of the buyer and it never doubted that the petitioner was not a dealer in such materials. The Appellate Tribunal, on second appeal, found as follows: "As and when the sister concerns require any such articles they were supplied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition of a "dealer" in the Madras General Sales Tax Act, 1959, means "any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for deferred payment...or other valuable consideration." A "sale", therefore, as apprehended in both the enactments, would take into its fold the word "supply", provided such supplies are made by a dealer. All sales or supplies by a dealer are commercial activities. But all commercial activities may not be sales, and even if they are, they should be "in the course of business" of a dealer and should be integrated with such continuous trading activity of his. This leads on to the understanding of the expression "business". This is not defined in the Central Sales Tax Act, but has been included in the definitions under section 2 of the Madras General Sales Tax Act. According to section 2(d) of the Madras General Sales Tax Act, 1959, "'business' includes (i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods in question, the person concerned entertained the object of selling them or supplying them in a commercial way and if such an intention is discernible in the conduct of the buyer even at the inception and if the goods so purchased are dealt with by him in the commercial course of his business and ultimately integrates the same with a sale, then such a transaction would come within the net of taxation. This is so because his primary intent to sell the same when he purchased it, lends support and colour to the transaction as a sale by a dealer within the meaning of taxation laws. The Supreme Court in State of Gujarat v. Vivekanand Mills[1967] 19 S.T.C. 103 (S.C.). was considering the case of a dealer who was carrying on the business of manufacturing cotton fabrics and who agreed to purchase under user's import licence a large quantity of Californian cotton. In the expectation that the shipment might arrive late, the dealer made arrangements to purchase equally a large quantity of similar cotton to meet his immediate requirements. The Californian cotton however, arrived unexpectedly earlier. The dealer thus blocked up a large slice of his capital and he was constrained to sell hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of his normal trade and whether such an acquisition by him and the later dealing of his with reference to that commodity was with the intention of sale with all its grammatical variations and cognate expressions. In all such cases, it is not in dispute that there is a transfer of property in the goods by one to the other and it is in the course of a trading activity for cash or other valuable consideration. But, as has been repeatedly pointed out by this court and the Supreme Court, it is the commercial nature of the transaction and the positive intent behind the deal that ultimately weighs and decides the issue. If, therefore, the above principles of law are borne in mind, it is easy to comprehend the nature and purport of the transactions of the petitioner in the instant case. It may be that the commodities which it supplied or sold to its sister concerns or others did form part of its capital assets at one time. But yet the goods being not useless or unserviceable articles, and the transactions of the petitioner not being isolated, but regular, continuous and frequent and supported by consideration, the findings given by the Tribunal and the revenue when they notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and selling that the transactions in question are caught. We are unable to agree that the finding of fact arrived at by the Tribunal is not supported by any legal evidence nor is it an irrational conclusion on the relevant facts noticed by the Tribunal. The Tribunal has decided that the intention of the assessee was to indulge in a transaction which is in the nature of a sale. Accepting, therefore, the finding of fact by the Tribunal below that the transactions related to sales of new unused articles to the sister concerns of the petitioner and others, we have no hesitation in holding that the order of the Tribunal and the findings rendered therein are correct. It is not as if the surplusage of the goods occurred by inevitable accident or in the usual course. It appears to us that such surplus capital goods were acquired with a definite purpose of supplying the same to its sister concerns, and such an intention being inhered in the conduct of the petitioner, the turnover brought to tax has been rightly brought to tax as assessable turnover. This tax revision case therefore fails and is dismissed with costs. Counsel's fee Rs. 100. Petition dismissed. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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