TMI Blog1985 (8) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of this Court, the writ petitions should have been allowed and the assessments should have been quashed - Civil Appeal No. 1748, To 1757 of 1973, - - - Dated:- 29-8-1985 - TULZAPURKAR V.D., SABYASACHI MUKHARJI AND RANGANATH MISRA JJ. B.B. Ahuja and S.K. Nandy, Advocates, for the respondents. O.P. Sharma and R.N. Poddar, Advocates, for the appllant. -------------------------------------------------- The judgment of the Court was delivered by RANGANATH MISRA, J. -The short point raised in these appeals by special leave directed against the judgment of the Gauhati High Court is as to whether the assessee-appellant is liable to be taxed under the Assam Finance (Sales Tax) Act, 1956 ("State Act" for short) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner in recovering the value of the above-mentioned medical stores from the institutions mentioned earlier, adds 10 per cent of the purchase prices of such medical stores as departmental charges to meet the administrative costs only. That the supply of medical stores by the petitioner is neither its avocation nor profession and there is no element or object of profit-making in all its dealings with the institutions mentioned earlier. The transactions carried on by the petitioner-Depot are not of commercial nature and the Depot functions only as a distribution centre with the sole object of ensuring the supply of pure drugs and medicines at lesser prices than available in the market to the Central and State Government institutions within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view to making profit it would not constitute business and the appellant cannot be held to be a dealer liable to tax under the two Acts. The High Court referred to the definition of dealer in section 2(b) which requires business of buying or selling of goods to be carried on. Certain decisions of this Court were placed before the High Court in support of the appellant's stand that without profit-motive the transactions would not constitute business even if there was frequency, volume, certainty and regularity. The High Court, however, held: "It is difficult to hold that the Government of India in this case is absolutely regardless of the question of possibility of profit rather than loss. The very formula 'No profit-No loss' clearly poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e some monetary gain out of a transaction or even a series of transactions. It predicates a motive which pervades the whole series of transactions effected by the person in the course of his activity.........." In Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 (SC), the same question came up for examination. Hindustan Steel Ltd., the appellant, was procuring cement, bricks and iron materials and was supplying the same from its stores to contractors working under it by recovering the cost price along with a further sum to cover handling expenses. It took the stand before the sales tax authorities that the supplies to contractors on recovery of price together with the extra sum did not constitute business. This Court referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'dealer' only if there is profit-motive." On the basis of these authorities the position is clear that in respect of the pre-amended period when in the definition of the term "business" profit-motive had not been omitted, in the absence of profit-motive transactions though satisfying the requirement of volume, frequency, continuity and regularity, would not constitute business so as to make a person carrying on such transactions a dealer. Reliance was placed by counsel for the respondents on two decisions one of this Court and the other of the Punjab and Haryana High Court. In Deputy Commercial Tax Officer, Saidapet, Madras v. Enfield India Ltd. Co-operative Canteen Ltd. [1968] 21 STC 317 (SC), the question for consideration was whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have come to the conclusion merely because of the frequency and the volume of the sales, the inference cannot be sustained." In the instant case, as already shown, the appellant had from the very beginning taken the stand that its transactions were without any profit-motive. The burden lay on the Revenue to show that these transactions were carried on with profit-motive, whether profit was actually earned or not being of no material importance, and no investigation had been made by the respondent into this aspect when it made the assessments. Nor was the High Court called upon to record such a finding on the basis of any material placed and the respondent remained satisfied by pleading a bare denial to the assertion in the writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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