1976 (11) TMI 184 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessability of turnover relating to old newspapers and other waste.
2. Assessability of turnover relating to glazed newsprint.
3. Assessability of turnover relating to print waste and cut waste.

Detailed Analysis:

1. Assessability of turnover relating to old newspapers and other waste:
The judgment pertains to a petition filed by the State under section 38 of the Tamil Nadu General Sales Tax Act, 1959, to revise the order of the Sales Tax Appellate Tribunal for the assessment year 1968-69. The turnover in question includes sales of old newspapers, print waste, and cut waste. Referring to a previous judgment, the court held that transactions incidental or ancillary to the main trade or business are liable to tax. The court emphasized that turnover related to unsold newspapers and waste was liable to tax based on the definition of "business" in the Act. The court rejected the argument against taxing the turnover of old newspapers and waste, citing precedent and the broad definition of "business" under the Act.

2. Assessability of turnover relating to glazed newsprint:
The Tribunal had excluded a sum representing the turnover from the sale of glazed newsprint, contending it was not part of the appellants' business. However, the court disagreed, stating that the sale of glazed newsprint purchased for a specific publication was incidental to the business of printing, publishing, and selling newspapers. The court applied the reasoning from a previous judgment to assert that such transactions, even if not the main business activity, were connected to the main business and hence liable to tax. The court overturned the Tribunal's decision and held the turnover from glazed newsprint as assessable for tax.

3. Assessability of turnover relating to print waste and cut waste:
The court addressed the contention that the turnover from print waste and cut waste should not be included in the assessable turnover. The court found no merit in this argument, stating that such waste constituted unused or unserviceable paper, which was ancillary to the business of printing, publishing, and selling newspapers. Citing a Supreme Court judgment on a similar issue, the court held that the turnover from print waste and cut waste was also liable to tax. Consequently, the court allowed the tax revision petition, setting aside the Tribunal's order on the turnover related to print waste and cut waste, totaling Rs. 6,24,373.30, with no costs imposed.

In conclusion, the court upheld the tax liability on all disputed turnovers, emphasizing the broad interpretation of "business" under the Act and the connection of various transactions to the main business activities of the assessee.