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TMI Blog1996 (11) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... e first time on November 6, 1974 in Mandi Region for Rs. 1,67,227. It was effecting sales in every year of the old spare parts and old vehicles which were found to be unserviceable for them though they were useful to others. In the year 1974-75, there was no sale from December 6, 1974 to March 31, 1975 and no sales tax was involved. In the year 1975-76, the Corporation's gross turnover was Rs. 2,92,046.50, in the year 1976-77, the gross turnover was Rs. 11,62,713.52 and in the year 1977-78, the gross turnover was Rs. 18,61,554.22. For the said three years, the Corporation was assessed to sales tax and the assessing authority passed an order on June 30, 1979. On appeal the Deputy Excise and Taxation Commissioner, Himachal Pradesh (South Zone), Shimla, rejected the contention of the Corporation that it was not a dealer and it was not doing business within the meaning of the H.P. General Sales Tax Act, 1968. The order of assessment was confirmed by the Excise and Taxation Commissioner by his order dated September 30, 1980. The Corporation filed an appeal which was taken as revision under section 31 of the H.P. General Sales Tax Act, 1968 by the Excise and Taxation Commissioner. He dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Commercial Taxes, Coimbatore Division v. Sri Thirumagal Mills Limited [1967] 20 STC 287 (Mad.). After referring to some of the passages of the judgment, the court observed as under: "In this view it held that the fair price shop which the assessee, a spinning mill manufacturing cotton yarn, had opened to make available to its workmen sale of commodities at fair prices could not be said to be carrying on the business of selling commodities in the fair price shop in a trade or commercial sense even if profit accrued to it and it was, therefore, with reference to the fair price shop, not a dealer within the meaning of the Act. This decision does not take note of the word 'such' in the second sub-clause, which, in our view, imports by reference the definition in sub-clause (i) into that of sub-clause (ii). A similar question came up for consideration before the Andhra Pradesh High Court on the analogous provisions of the Andhra Pradesh General Sales Tax Act in Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh [1972] 30 STC 26. In that case, the assessee-company maintained a canteen for the use of workers in compliance with the provisions of the Factories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oiled drums, hose pipes, etc., which were also held to be connected with the business of the company and it was a finding of fact and the very nature of the particular scrap prima facie indicated that it was connected with the business of the company. The court observed as follows: "This Court had observed, it cannot be presumed that when the goods were acquired, there was an intention to carry on business in those discarded materials nor are the discarded goods by-products or subsidiary products or are produced in the course of manufacturing process; that they are either fixed assets of the company or are goods which are incidental to the acquisition or use of stores or commodities consumed in the factory and that when these go into the profit and loss account of the business and may indirectly be said to reduce the cost of production of the principal item, the disposal of those goods on the account cannot be said to be part of or incidental to the main business of selling textiles. As the scrap in that case was not held to be incidental to the acquisition or use of stores or commodities consumed in the factory, the turnover was not included but in the case of caustic liquor w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t judgment. 11.. In Board of Revenue v. A.M. Ansari [1976] 38 STC 577 (SC), the Forest Department of the Andhra Pradesh held an auction in respect of various items of forest produce, such as, timber, fuel, bamboos, minor forest produce, beedi leaves, tanning barks, parks mohwa, etc., the question was whether the persons who were the highest bidders in respect of some items of the forest produce were liable to pay sales tax on the bid amount under the Act applicable to that State. The court held that in view of the amendment introduced in 1966 the consideration of profit-motive could not be regarded as an essential constituent of the term "business" in section 2(1)(bbb) of the Andhra Pradesh General Sales Tax Act, 1957 but the other ingredients of the term "business", namely, volume, frequency, continuity and regularity of transactions of sale and purchase must be satisfied in order that a person could be said to be carrying on the business of selling goods. 12.. It was found on the facts that such sales of forest produce were carried on only annually and not at frequent intervals and the important element of frequency was lacking in the case and, therefore, the Government could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the meaning of the sales tax statutes in respect of such business then the transactions connected with or ancillary to such business though in the nature of sale will not make the person concerned a 'dealer'." 16.. The second proposition laid down as above runs counter to the judgment of the Supreme Court in State of Tamil Nadu v. Binny Ltd., Madras [1982] 49 STC 17; AIR 1980 SC 2038. It is seen that the judgment of the Supreme Court was rendered later than the judgment of the Calcutta High Court. Hence, the judgment of the Calcutta High Court cannot be accepted by us as correct. 17.. Reliance is also placed on the judgment of the Orissa High Court in State of Orissa v. Orissa Road Transport Company Ltd. [1983] 53 STC 329. 18.. After referring to the judgments in State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. [1973] 31 STC 426 (SC), District Controller of Stores, Northern Railway, Jodhpur v. Assistant Commercial Taxation Officer [1976] 37 STC 423 (SC) and Board of Revenue v. A.M. Ansari [1976] 38 STC 577 (SC), the court observed as follows: "The assessee's main business is running of buses and providing transport facilities to the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the court went on to refer to the judgment of the Supreme Court in District Controller of Stores, Northern Railway, Jodhpur v. Assistant Commercial Taxation Officer [1976] 37 STC 423 and observed that it did not agree with the contention advanced by the Government Pleader. The only sentence found in the judgment is that "the decision relied upon by him would not be of any assistance to him". The judgment does not disclose as to how the judgment of the Supreme Court was not applicable to the facts of the case before them. No reason has been given by the Division Bench. However, the Division Bench proceeded to refer to the judgment in Burmah Shell's case [1973] 31 STC 426 (SC) and observed that the earlier judgment is one of three-Judge Bench while the later one is of two-Judge Bench. 22.. We are unable to find out the inference drawn from the said fact by the Division Bench of that High Court. Ultimately, the Division Bench said that they did not agree with department and held that the activities of the Corporation did not constitute business within the meaning of Andhra Pradesh Road Transport Act. This decision will be of no help to the Corporation in this case as there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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