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TMI Blog1983 (2) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the plant sold for Rs. 6.5 lakhs in the financial year 1965-66 was not liable to sales tax? (2) Whether, under the facts and circumstances of the case, the Tribunal was justified in holding that the sale of spare parts and accessories sold at Rs. 41,312 during the year 1966-67 was not liable to sales tax?" 2.. The material facts giving rise to these references briefly are as follows: The assessee is engaged in the manufacture and sale of strawboards. The assessee had two plants for the manufacture of strawboards. In the assessment year 1965-66, the assessee sold on account of shortage of raw materials, heavy excise duty and water scarcity, one of its plants for a sum of Rs. 6.5 lakhs and in the assessment year 1966-67, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance was placed on the decisions in State of Tamil Nadu v. Burmah Shell Oil Storage & Distributing Company of India Ltd. [1973] 31 STC 426 (SC), Commissioner of Sales Tax, M.P. v. Straw Products Ltd., Bhopal [1982] 15 VKN 350, District Controller of Stores, Northern Railway, Jodhpur v. Assistant Commercial Taxation Officer [1976] 37 STC 423 (SC) and State of Tamil Nadu v. Binny Limited, Madras [1982] 49 STC 17 (SC). 4.. In reply, Shri Sanghi, learned counsel for the assessee, contended that in order that receipts from sale of a commodity might be included in the taxable turnover, it must be established that the assessee was carrying on business in that particular commodity. It was urged that even under the amended definition of "busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had sold his fixed assets on the closure of his business and it was in that context that it was held that the sale proceeds of that transaction were not exigible to tax. In the instant case, the short question for consideration is whether the sale of an old plant with its accessories by an assessee, who continues to carry on the business in connection with which the old plant and its accessories were acquired, is exigible to tax. 6.. Now section 2(bb) of the Act, which was in force at the relevant time, defined "business" as follows: "2(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, adventur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "business" under the Act, it is not, in our opinion, necessary for rendering a sale exigible to tax to show that the sale was of a commodity in which the assessee was carrying on business. If the sale is connected with or incidental to or ancillary to the main business of the assessee, then such transaction is "business" within the definition of that expression in section 2(bb) of the Act. The decision in Cementation Patel (Durgapur) v. Commissioner of Commercial Taxes, West Bengal, Calcutta [1981] 47 STC 385 is distinguishable on facts. In that case, it has been held that if the main business of a person is such that he cannot be held to be a "dealer" in respect of such business, then the transactions connected with or ancillary to such bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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