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TMI Blog1985 (12) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... eft, etc. Some time in motor claims the assessee gets the salvage which is disposed of by inviting quotations periodically but the authorities under the Act levied sales tax on the amount received from the disposal of salvage. It is also alleged that the assessee is not a "dealer" and is not carrying on any business of buying or selling goods and as such no sales tax can be levied on it. It is not necessary to go into the details of the facts of each case as they are not relevant for deciding the question of law as to whether the activities carried on by the applicant are "business" as defined in section 2(aa) and it is a "dealer" within the meaning of section 2(c) of the Act. Before entering into the controversy it would be necessary to refer to the definitions given to the words "business" and "dealer" in sections 2(aa) and 2(c) of the Act which, in so far they are relevant for the case, are as follows: "2. (aa) 'business', in relation to business of buying or selling goods 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tally, by reason of the settlement of the claim in connection with an accident to that vehicle. The petitioner auctioned the said damaged motor car. The sales tax authorities under the Madras General Sales Tax Act, 1959, levied sales tax on the sale proceeds of the said damaged motorcar. The matter came up before the Madras High Court and the question arose whether the petitioner was a "dealer" within the meaning of section 2(g) of the Madras General Sales Tax Act. The Madras High Court observed that "they do not buy or sell or supply or distribute goods either for cash or for deferred payment or for any other valuable consideration. Occasionally, when in the course of their activity they come into possession of a damaged vehicle over which they settle their claims under the insurance policy taken for the purpose and if in order to get rid of the damaged vehicle, they engage the services of an auctioneer and sell the same, they cannot even be characterised as casual traders ". It relied on a decision of the Supreme Court in State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 STC 1 (SC) in which it was held that to attribute an intention to carry on business of selling goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venture 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; but does not include activities of sale, supply or distribution of goods carried on without any profit-motive by- (i) any charitable or religious institution in the performance of its functions for achieving its avowed objects; and (ii) an educational institution, where such sale, supply or distribution is made to its students." In that case the Supreme Court observed: "We also think that there is no fallacy in thinking that the railway since it is concerned in the activity of transportation is engaged in commerce within the meaning of clause (i) of the definition and that the sale of unserviceable materials and scrap-iron, etc., is transaction in connection with or ancillary to such commerce within clause (ii) of that definition." The aforesaid observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of section 2(10) of the Gujarat Sales Tax Act, 1969, and it was liable to pay sales tax on the sales of cotton-seeds effected by it?" A Division Bench of that Court after considering the definitions of "dealer" and "business" in the Gujarat Sales Tax Act in detail answered the question "in the negative, that is, in favour of the assessee-society and against the State Government". While dealing with the term "business" particularly the activity which is in the nature of mere service or profession which has been excluded from the category of business activity, the Gujarat High Court discussed in detail various authorities and statutes on the subject including Corpus Juris Secundum, Volume 79, and observed: "The marginal line between the transactions which are purely in the nature of sale and those involving service simpliciter is very thin but fine one. On principle and authority, it is well-settled that 'the classification of such transactions should ordinarily be determined by the dominant factors involved therein. If the value of the property or materials furnished is the dominant and paramount factor in the gross charge and the service rendered in connection therewith ..... X X X X Extracts X X X X X X X X Extracts X X X X
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