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TMI Blog1994 (1) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... id Act and whether for delayed payment of such advance towards the tax, interest under section 11B of the RST Act could have been levied, at the relevant time?" Learned counsel for the assessee has submitted that the Director-General of Supplies and Disposals is a Government of India department and is effecting sale of such condemned articles, which are no longer required by the Government. It is submitted that the sales of the goods would not attract liability of sales tax because of the prohibition in article 285(1) of the Constitution of India. Article 285(1) provides that the property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within the State. In re, Sea Customs Act, 1878, AIR 1963 SC 1760, the question with regard to the interpretation of article 285(1) and article 289(1) was considered and it was observed that the excise duty is tax on production or manufacture and not on property as such. The said articles of the Constitution were held concerned with tax directly on income or on property and not with tax which may indirectly affect income of property. It was observed: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention to continue the activity of carrying on the transactions for a profit. But no single test or group of tests is decisive of the intention to carry on a business. It must be decided in the circumstances of each particular case whether an inference could be raised that the assessee is carrying on the business of purchasing or selling of goods within the meaning of the statute." It is submitted by the learned counsel for the assessee that the definition of "dealer" which has been given in section 2(f) of the RST Act covers only those persons who are carrying on business. The said clause contemplates a business and, therefore, there must be a regular activity in the nature of business. The word "business" was added in section 2(cc) by Act No. 9 of 1965 and has been defined as under: "2(cc) '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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... infer from a course of transactions that it is intended thereby to carry on business, ordinarily there must exist the characteristics of volume, frequency, continuity and system indicating an intention to continue the activity of carrying on the transactions for a profit. But no single test or group of tests is decisive of the intention to carry on a business. It must be decided in the circumstances of each particular case whether an inference could be raised that the assessee is carrying on the business of purchasing or selling of goods within the meaning of the statute." In the above case, the dispute was with regard to disposal of surplus material which was left in India at the conclusion of the last war by the American Government and used by the Government of India itself and the surplus left with the Government of India which was no longer required or was not useful or had become obsolete, was sold by the assessee. It was held by the apex Court that the appellant was not carrying on the business of selling goods and was not a dealer. This decision of the apex Court was given when there was no such provision which has been inserted in the Rajasthan Sales Tax Act by Act No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in dispute and even if the registration was taken voluntarily, even then it is not proper at this stage to challenge the position that the assessee is not a dealer. The third point which has been raised by the learned counsel for the assessee is that the advance which was required to be deposited under section 7(2A) of the RST Act was not a tax and, therefore, no interest could be charged under section 11B. Reliance has been placed on the definition of section 2(r) in which tax has been defined as under: "tax" means a tax leviable under the provisions of this Act. From the definition of "tax" which has been given above, it will be evident that tax means tax leviable under the provisions of this Act. The advance tax which is liable to be paid cannot be treated differently than the tax and is part of the process of payment of tax. The amount which has been paid as tax will assume the character of a tax and once advance tax is required to be deposited, it is because of the fact that tax is leviable and, therefore, before quantification of final liability, the process starts and an amount is required to be deposited by way of advance tax. Thus the amount which has been deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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