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TMI Blog1990 (10) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... ller of a motor vehicle which had not been purchased locally and as such was assessable to tax under section 5(3)(a) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the Act"). The undisputed facts are that the assessee-company operates its road transport service carrying passengers with its fleet of over 40 buses. The company also runs a garage to carry out repairs and maintenance work of its own fleet of buses as well as buses of other persons similarly operating their buses in the area whenever such buses require repair and maintenance. In the assessment year 1976-77, in the return filed, it was disclosed that four motor vehicles and three buses and one autorickshaw were sold for a sum little over rupees one lakh. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as scrap notwithstanding the fact that they were sold in the relevant years for sums which cannot be said to be attractive or commensurate with the value as motor vehicles. In fact we have no details as to the model of the bus, the year of its manufacture, the number of miles it had run and such other details which would assist the court or the assessing authority to determine as to the nature and condition of the goods sold. The question which really falls for consideration is whether such sales could be treated as sales in order to keep up the reputation of the assessee-company as the buses were sub-standard and were sold incidental to the business or such sales were not incidental or part of the business or financial turnover of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." With the result, the activities of the Northern Railway were considered to be included in its business of transporting passengers and goods by tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transactions carried on with a profit-motive, an inference that it was intended to carry on business in the commodity may arise. But it does not arise merely because the price received by sale of discarded goods enters the accounts of the trader and may on an overall view enhance his total profit, or indirectly reduce the cost of production of goods in the business of selling in which he is engaged." In other words, the learned counsel submitted to us that frequency and volume of the trade should be necessary factors that should be taken notice of to come to the conclusion whether it was a stray sale or replacement of unserviceable goods in connection with the business. We do not find, that decision in any way assists the assessee-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had run. Therefore, we must assume that they were motor vehicles and were sold as such motor vehicles and not as scrap normally so understood, assessed to tax under entry 70 of Schedule II read with sub-section (3)(a) of section 5 of the Act. In that view of the matter we hold that the sale of autorickshaw which was not a vehicle used for transporting passengers but used to assist the management of the company affairs or for personal use of the company director or manager or some other official cannot be said to be a sale which was done for replacement of any vehicle used in the business. Therefore, we hold that that sale was liable to be exempted as not part of the sale turnover of the company on that count. In so far as for the year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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