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TMI Blog1978 (4) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Sales Tax, Raipur, as well as the Deputy Commissioner of Sales Tax, Raipur, in the first appeal, held the sale of the office car to be taxable on the ground that the sale of the car was a transaction in connection with the assessee's business essentially, when it was a dealer in motor cars. In second appeal, the Board of Revenue held that this was not a sale that was taxable in the hands of the assessee. 3.. In accepting the assessee's contention, the Board of Revenue observed: "It seems that in clause (ii) of the definition of 'business', the 'connection' contemplated is proximate and not remote. Naturally there may be scope for legitimate difference of opinion as to where to draw the dividing line. Compared to the Instances cited above in this paragraph (vegetables and canteen), the sale of used materials or discarded assets has a closer connection with the main business. But even in this, if a sugar factory disposed of old furniture of its office, the connection with the business is not so close, as the disposal of, say, a truck regularly used in the transport of raw materials, waste products or the manufactured product. The statement of objects and reasons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cars, this fact is not relevant for determining whether the purchase and sale of a car for office use, should be included in the taxable turnover." Then it goes on to say: "It can be fairly argued that the purchase and sale of a car for office use is not itself directly actuated by the profit-motive. But the definition of 'business' makes the profit-motive or actual accrual of profit irrelevant. Clause (ii) of the definition includes in 'business' any transaction in connection with, or incidental or ancillary to, such trade, commerce, etc. It means that transactions in connection with or incidental or ancillary to the main line of business are included in the definition of 'business'. Even so, it will be necessary to determine where to draw the line. For instance, a businessman may maintain a guest house for which some articles might be purchased and occasionally the guest house may even sell meals or snacks. A dealer, particularly a factory owner, maintains a canteen. In fact, a factory employing more than a certain number of workers has to maintain a canteen under the law. The question would be whether canteen sales are to be included in the dealer's turnover. Another questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... define the term "business". To obviate the difficulty created by the decisions of the various High Courts, including that of the Supreme Court in State of Gujarat v. Raipur Manufacturing Co. Ltd.[1967] 19 S.T.C. 1 (S.C.). and of this court in Commissioner of Sales Tax v. Ram Dulare Balkishan Bros.[1963] 14 S.T.C. 202. and Commissioner of Sales Tax v. Perfect Pottery Co. Ltd.[1970] 26 S.T.C. 214., the State Legislature inserted an enlarged definition of the word "business" by the Amendment Act No. 16 of 1965, which reads as follows: "(bb) '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 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." It would be noticed that under the enlarged meaning of the term "business" as defined in section 2(bb), under both the parts of the definition, profit-mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Andhra Pradesh High Court, interpreting an analogous provision 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., holding that in view of the definition of "business" as amended by the Amendment Act of 1966, proof of profit-motive is unnecessary to constitute business, and observed: "Dealing with the case of Deputy Commissioner of Commercial Taxes v. Thirumagal Mills Limited[1967] 20 S.T.C. 287., the learned judges said that they were unable to agree with that case as the Madras High Court had not paid sufficient attention to the word 'such' occurring in the second part of the definition, which according to them obviously referred to the 'trade, commerce, manufacture, adventure or concern' mentioned in the first part of the definition, that is to say, 'trade, commerce, Manufacture, adventure or concern' of which a motive to make gain or profit is not an essential requisite, nor was it permissible to hold that there was no 'business' in the commercial sense of 'business' with a motive to make profit, when such motive has been expressly declared unnecessary by the legislature. In their view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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