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TMI Blog1971 (10) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act? The Financial Commissioner declined to refer the said questions of law and on an application made by the assessee under section 22(2) of the Punjab General Sales Tax Act, 1948, this court directed the Sales Tax Tribunal to refer the said questions of law for the opinion of this court. The assessee, Messrs. Atlas Cycle Industries Ltd., Sonepat, is engaged in the business of manufacture of cycles and their parts for sale. During the manufacturing process certain waste material, such as scrap iron, is produced. This material is sold by the assessee. In the returns for the assessment years 1957-58, 1958-59, 1959-60 and 1960-61, the assessee did not show in his gross turnover the sale of this waste material, on the ground that the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the assessing authority on these two matters. Against the order of the Deputy Excise and Taxation Commissioner, the assessee filed a revision petition before the joint Excise and Taxation Commissioner. The joint Excise and Taxation Commissioner allowed the revision petition so far as the claim of the assessee with regard to the sale of scrap iron was concerned, but he rejected the contention of the assessee with regard to the sales of provisions. The assessee then went up in further revision against the order of the Joint Excise and Taxation Commissioner with regard to the matter of sale of provisions to its employees. The Financial Commissioner took up the other matter regarding scrap iron suo motu. The revision petitions of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no profit was being made and the transfer of those articles was on "no-profitno-loss" basis. A similar matter fell for consideration before the Calcutta High Court in The Indian Iron Steel Co. Ltd. v. Member, Board of Revenue, West Bengal[1971] 27 S.T.C. 373. under the Bengal Finance (Sales Tax) Act, 1941, and it was held that: "A person cannot be a 'dealer' under the Bengal Finance (Sales Tax) Act, 1941, unless he carries on the business of selling goods in a commercial sense. In other words, activity of a commercial character must be clearly established before a person can be brought into the net of taxation under the Act. If an employer sells without any profit-motive certain commodities of daily use to the employees to provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 19 S.T.C. 1 (S.C.). The ratio of the Supreme Court decision is that by-products or subsidiary products arising in the course of manufacturing process, if they are disposed of in a regular manner would form part of the business of the assessee, because to quote the words of the Supreme Court, "when such subsidiary product is turned out in the factory regularly and continuously and is being sold from time to time, an intention to carry on business in that commodity may be reasonably attributed to the assessee." Therefore, in every case what will have to be seen is, what is the main business of the assessee and what is the waste material, the sale proceeds of which are to be brought into the taxable turnover of the assessee. Can the waste ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Private Limited v. The State of Madras[1968] 22 S.T.C. 485. That was a case of a body-builder. In the process of building of the bodies certain scrap aluminium came into being. The sales tax authorities brought the sale proceeds of the scrap aluminium to tax by including the same in the taxable turnover of the assessee. The Madras High Court held that it could not be done. It appears to us that this case is distinguishable. In the business of body-building no manufacturing process was involved in which the resultant waste was aluminium. It could not, therefore, be held that the resultant waste aluminium was the result of a manufacturing process. The Madras decision does not in any way support the contention of the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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