1973 (6) TMI 63 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the sale of unsold newspapers and other waste by the assessees constitutes taxable turnover under the Madras General Sales Tax Act, 1959.

The judgment delivered by the Madras High Court in 1973 involved a dispute regarding the taxability of the turnover generated from the sale of unsold newspapers and waste by the assessees during the assessment year 1965-66. The assessing authority had treated this turnover as taxable under the Sales Tax Act, a decision upheld by the Appellate Assistant Commissioner. However, the Tribunal overturned this decision, stating that the sale of unsold newspapers and waste did not qualify as sales in the course of the assessees' business. The State, aggrieved by this decision, filed a revision challenging the Tribunal's ruling. The State contended that the transactions in question were connected to the assessees' main business of publication and sale of newspapers, especially after the amendment of the definition of "business" in 1964. The State highlighted that the assessees themselves had applied for registration as dealers in unsold newspapers and waste, indicating their business involvement in these commodities. The Court agreed with the State's contention, emphasizing that the assessees' registration application supported the conclusion that the sale of unsold newspapers and waste was connected to their main business activities. The Court clarified that even if the assessees' primary business was printing and selling newspapers, their incidental or ancillary business in unsold newspapers and waste was still taxable under the Sales Tax Act. The Court referenced a previous Supreme Court decision to support the taxability of transactions connected with the main business, even if there was no profit motive. Therefore, the Court set aside the Tribunal's decision and ruled that the transactions in question were subject to tax under the Sales Tax Act, allowing the State's petition with costs.