TMI Blog1969 (2) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court held that in supplying ice the society was not carrying on business in ice, and on that account was not a "dealer". Whether in a particular set of circumstances a person may be said to be carrying on business in a commodity must depend upon the facts of that case and no general test may be applied for determining that question. - Civil Appeals Nos. 940 and 941 of 1966 - - - Dated:- 3-2-1969 - SHAH J.C., AMASWAMI V. AND GROVER A.N. JJ. M.C. Chagla, Senior Advocate (B.L. Neema and Mrs. Anjali K. Varma, and J.B. Dadachanji of J.B. Dadachanji and Co. with him), for the appellant. I.N. Shroff, for the respondent. -------------------------------------------------- The judgment of the Court was delivered by SHAH, J.- In respect of assessments to sales tax for two accounting periods April 1, 1961, to June 30, 1961, and July 1, 1961, to September 30, 1961, the Board of Revenue, Madhya Pradesh, referred the following questions to the High Court of Madhya Pradesh for opinion: "(1) Whether, in the facts and circumstances of the case, the notice in Form XVI that was served on the applicant was invalid and therefore the assessment of the applicant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1922, giving the assessee 29 days for filing the return was "entirely illegal". In Jamna Dhar Poidar and Co. v. Commissioner of Income-tax [1935] 3 I.T.R. 112., it was held, following the judgment in Kajorimal Kalyanmal's case[1930] 3 I.T.C. 451., that a notice which does not give to a taxpayer under section 22(2) of the Income-tax Act, 1922, clear notice for furnishing a return, of thirty days from the date of service is illegal. But these cases were decided under section 22(2) of the Income-tax Act, 1922, before it was amended by the Income-tax (Amendment) Act, 1939 (7 of 1939). Under the section as it then stood, it was enacted that the Income-tax Officer shall serve a notice upon any person whose total income is in the opinion of the Income-tax Officer of such an amount as to render that person liable to pay income-tax. The section was held to be mandatory. But the terms of rule 33 of the Madhya Pradesh General Sales Tax Rules are plainly not mandatory. The answer given by the High Court on the first question must be accepted. To appreciate the scope of the enquiry under the second question, the relevant provisions of the Act may be summarised. By section 2(d) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of articles to be sold by him is a dealer within the meaning of the Hyderabad General Sales Tax Act, 1950 (14 of 1950). In H. Abdul Bakshi and Bros.'s case [1964] 15 S.T.C. 644 (S.C.)., the assessees sold skins, after tanning hides and skins purchased by them. In the process of tanning, they had to use tanning bark purchased by them. This court held that the turnover arising out of the tanning bark purchased by the assessees for consumption in the process of tanning was liable to tax on the footing that the assessees were carrying on the business of buying goods, even though the goods bought were consumed in the process of tanning. In dealing with the question whether an activity of purchase of goods required for consumption in a manufacturing process may be regarded as a business, the court observed (at page 647): "A person to be a dealer must be engaged in the business of buying or selling or supplying goods. The expression 'business' though extensively used is a word of indefinite import. In taxing statutes it is used in the sense of an occupation, or profession which occupies the time, attention and labour of a person, normally with the object of making profit. To regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of section 7. The phraseology used in that section is somewhat involved, but the meaning of the section is fairly plain. Where no sales tax is payable under section 6 on the sale price of the goods, purchase tax is payable by a dealer who buys taxable goods in the course of his business, and (1) either consumes such goods in the manufacture of other goods for sale, or (2) consumes such goods otherwise, or (3) disposes of such goods in any manner other than by way of sale in the State, or (4) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce. The assessees are registered as dealers and they have purchased building materials in the course of their business; the building materials are tax- able under the Act, and the appellants have consumed the materials otherwise than in the manufacture of goods for sale and for a profit-motive. On the plain words of section 7 the purchase price is taxable. Mr. Chagla for the appellants urged that the expression "or other- wise" is intended to denote a conjunctive introducing a specific alternative to the words "for sale" immediately prece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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