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TMI Blog1989 (11) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap by way of salvage. 2.. In the year 1977-78, the appellant had entered into a contract of insurance with M/s. Plascom Industries insuring certain plastic goods against risks in transit. In the course of transit of the goods that were insured by the appellant, the goods were damaged and became useless to the insured. After paying compensation to the insured the appellant took possession of the said goods and disposed of them at a price of Rs. 58,800. In respect of this sale the Revenue took the view that the sale by the appellant was covered by the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act") and, therefore, called upon the appellant to register itself as a dealer under the Act. The appellant contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither a dealer nor a casual trader and therefore the view taken by the learned single Judge was not correct. It was also submitted that even though the activity of the appellant may be construed as one of business and the sale effected may be casual or incidental to that activity, inasmuch as the main activity of the appellant being only one of service and not of any business of buying and selling goods, the provisions of the Act are not attracted. 4.. In our view the contentions raised on behalf of the appellant are plainly untenable and deserve to be rejected. 5. In order to appreciate the contentions raised by the appellant it is necessary to refer to a few relevant provisions of the Act. Section 2 (f-2) of the Act defines "busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes of levy of tax; and (iii) that the concept of "business" takes within its sweep not only the main activity but also any transaction which may be incidental or ancillary to the main business. Therefore, any transaction which is incidental or ancillary to the main business also constitutes a business. Indeed, such provisions are available under the Bengal Finance (Sales Tax) Act, as amended from time to time, which was the subject matter of consideration by the Supreme Court in Member, Board of Revenue, West Bengal v. Controller of Stores, Eastern Railway, Calcutta [1989] 74 STC 5; AIR 1989 SC 1468. The Supreme Court in that decision summed up the law on the point as to who may be regarded as a dealer in these words: "In these appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Tax Officer [1972] 29 STC 539 (Mad.), Indian Insurance Companies' Association Pool v. Deputy Commercial Tax Officer [1969] 24 STC 79 (Mad.) and Oriental Fire and General Insurance Co. Ltd. v. Commissioner of Sales Tax [1986] 63 STC 246 (All.) and sought to contend that generally an insurance company does not carry on the business of buying and selling goods in the course of insurance business. It has to settle the claims of the insurers and thus comes into possession of damaged vehicles or other materials and it sells such materials and such sales are not made in the course of buying or selling goods but in the course of insurance business and the insurance company does not become dealer for making such sales. But this contention based ..... X X X X Extracts X X X X X X X X Extracts X X X X
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