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TMI Blog2012 (4) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of the appeal. Accordingly, while keeping the issue open, we hold that in the facts of the present case, the Tribunal was not justified in holding that the main activity of providing telecommunication services constitutes "business" under the Bombay Sales Tax Act. The first question is answered accordingly. In the present case, the specific case of the assessee was that selling the scrap materials was not the business of the assessee, that the Telegraph Act, 1885 under which the telecommunication services were rendered by the assessee specifically bars the assessee from carrying on any business activity and that the assessee has not collected tax on sale of scrap materials during the period in question. It is only at the insistence of the sales tax authorities the assessee has applied for and obtained registration with effect from January 31, 1985. Therefore, in the absence of any material to the contrary, the contention of the assessee that during the period in question tax has not been collected and paid on sale of scrap materials on the ground that such sales were not effected with a motive to make gain or profit could not be rejected and consequently the benefit of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not required by the assessee. Neither the main activity of providing telecommunication services nor the incidental activity of selling scrap materials were considered as a business activity and accordingly the assessee was not registered as a dealer under the Bombay Sales Tax Act, 1959 ( the BST Act , for short). As the expression business was to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture as per clause (5A) of section 2 of the Bombay Sales Tax Act introduced with effect from January 15, 1975, the Sales Tax Officer was of the opinion that the transaction of selling the scrap materials was a business activity liable to tax. Accordingly, show-cause notices were issued for the period from April 1, 1976 to March 31, 1984 and subsequently, by treating the assessee as an unregistered dealer, assessment order under section 33(6) of the Bombay Sales Tax Act was passed on March 28, 1985 for the period from April 1, 1976 to March 31, 1977 whereby the demand of sales tax on sale of scrap effected during the aforesaid period was confirmed. Similar assessment orders were passed in the other years in question. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es business activity, being an issue not raised by any of the parties and not decided by the authorities below, the Sales Tax Tribunal was not justified in travelling beyond the scope of the appeal and decide an issue which was not the subject-matter of the appeal. Accordingly, while keeping the issue open, we hold that in the facts of the present case, the Tribunal was not justified in holding that the main activity of providing telecommunication services constitutes business under the Bombay Sales Tax Act. The first question is answered accordingly. The second question referred to us relates to the decision of the Tribunal in holding that the assessee is a dealer carrying on the business of selling scrap materials and, hence, liable to pay sales tax in respect of such sales effected during the period April 1, 1976 to March 31, 1984. Liability to pay tax under the Bombay Sales Tax Act is on the dealer whose turnover of sales or purchases during the year exceeds the relevant limits prescribed under the Bombay Sales Tax Act. Though the expression dealer under section 2(11) of the Bombay Sales Tax Act includes the Departments of the Central/State Governments carrying on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976 to March 31, 1984, i.e., prior to August 16, 1985 and, therefore, the Tribunal could not have applied the law applicable to the transactions brought within the purview of the Bombay Sales Tax Act with effect from August 16, 1985 to the transactions carried on during the period prior to August 16, 1985. In other words, when the Legislature has expressly provided that with effect from August 16, 1985, the transactions of selling the scrap/ discarded materials by the entities specified in the Explanation to section 2(11) of the Bombay Sales Tax Act shall be treated as business transactions carried on by a deemed dealer, it was not open to the Tribunal to hold that such transactions effected prior to August 16, 1985 were business transactions carried on by a deemed dealer and, hence, liable to tax under the Bombay Sales Tax Act. The aforesaid reasoning is further fortified by section 30 of the 1989 Act. Section 30(1) of the 1989 Act provides that notwithstanding any judgment, decree or order of any court or Tribunal to the contrary, any assessment, reassessment levy or collection of tax in respect of any sales or purchases effected by any dealer during the period commencing fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y amending the expression business in section 2(5A) of the Bombay Sales Tax Act with retrospective effect from August 16, 1985 seeks to tax the sale of scrap materials by the deemed dealers covered under the Explanation to section 2(11) of the Bombay Sales Tax Act with effect from August 16, 1985 even if such sales were effected without any profit-motive. To put it differently, on account of the amendment to the expression business with retrospective effect from August 16, 1985, the deemed dealers covered under the Explanation to section 2(11) are liable to pay tax under the Bombay Sales Tax Act on sale of scrap materials effected after August 16, 1985 even if such sales were effected without any profit-motive. Thus, the Explanation inserted to section 2(11) on August 16, 1985 read with the amendment to the expression business with retrospective effect from August 16, 1985 and section 30(4) of the 1989 Act, makes it abundantly clear that the entities covered under the Explanation to section 2(11) are liable to pay tax on sale of scrap materials with effect from August 16, 1985, even if such sales were effected without any profit-motive. In the present case, we are concerned w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has merely followed the decision of the apex court in the case of District Controller of Stores [1976] 37 STC 423 (SC), which as noted earlier is distinguishable on facts. Moreover, this court in the case of Controller of Stores [1995] 99 STC 222 (Bom); 12 MLJ 88 (Bom) has not considered the effect of section 30(4) of the Maharashtra Act IX of 1989. Thus, both the aforesaid decisions relied upon by the counsel for the assessee do not support the case of the Revenue. The Maharashtra Sales Tax Tribunal has declined to apply section 30(4) of the Maharashtra Act IX of 1989 to the facts of the present case on the ground that the assessee was covered by the expression business as introduced by clause (5A) section 2 of the Bombay Sales Tax Act with effect from January 15, 1975. We see no merit in the above reasoning because, firstly, if the sale and purchase of scrap materials without any profit-motive effected by the entities specified under the Explanation to section 2(11) of the Bombay Sales Tax Act were covered under the definition of business as introduced with effect from January 15, 1975, then there was no need to amend the definition of the expression business by Maharash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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