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2012 (4) TMI 550 - BOMBAY HIGH COURTActivity of rendering telecommunication service - whether the Tribunal was legally justified in holding that the applicant's activity of rendering telecommunication service constitutes a 'commerce' within the meaning of the term in the definition of 'business' in the said section 2(5A) and that therefore the said activity constitutes 'business' for the purpose of the Bombay Act? Whether the Tribunal was legally justified in holding that the appellant is a 'dealer' carrying on business of buying or selling of goods and that therefore his sales of scrap material, etc., effected during the said periods are liable to tax under the Bombay Act? Held that:- The decision of the Tribunal to the extent it holds that the main activity of the assessee, viz., providing telecommunication services constitutes 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. 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 section 30(4) of the Maharashtra Act IX of 1989 could not be denied to the assessee. In the result, the second question is answered in the negative, i.e., in favour of the assessee and against the Revenue.
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