TMI Blog1963 (4) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... h [1960] 11 S.T.C. 526. was relied on in coming to that conclusion. The Board of Revenue took up the matter in revision suo motu under section 34 of the Madras General Sales Tax Act, 1959. The Board purported to examine the appellate order. It was of the view that the decision of the Andhra Pradesh High Court does not apply to the case. It observed: "According to the provisions of the Act, even a person who carries on the business of buying only is a dealer as defined in section 2(g) of the Act. In the present case, the assessees were dealers. They sold tanned skins, bought raw skins and both the purchase and sale were transactions in the course of their business. Therefore, the dealers who are the last purchasers of tanning materials are liable to tax under the Act ....." In this view, therefore, the Board set aside the order of the Appellate Assistant Commissioner and restored the order of assessment bringing this sum of Rs. 85,000 and odd to tax. The assessees appealed against this order of the Board of Revenue. The short question is whether the assessees are dealers and whether before the purchase turnover of the tanning materials can be taxed in their hands, should it be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned judges found that there was a clear finding that there was complete absence of a profit-making motive in the activities carried on by the society. While in that view that itself would take the assessees in that case out of the category of dealers, the learned judges reached that conclusion on other grounds as well. The next case relied upon is Nagpur Yarn and Dyes Merchants Association v. State of Bombay[1958] 9 S.T.C. 530. That was a case where certain persons dyed yarn brought to them by customers. The department purported to tax the transaction as one of sale. Apparently reliance was placed upon the fact that while yarn was tax-free under the Act, dyed yarn was not specifically declared to be tax-free. The ratio of the decision was merely that yarn does not cease to be tax-free merely because it is dyed. The learned Judges took the view that in that particular case, it was only charges for labour that was covered by the payment made by the customer. This decision has been pressed into service by the learned counsel for the purpose of indicating that in that case the dyestuff used by the assessees was consumed in the process of dyeing. A somewhat analogous argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese tanning materials involves the profit motive. If the existence of the profit motive in entering into the transaction brings the series of transactions within the expression "in the course of business", there seems to be no room for doubt that the process of buying had the profit motive as a necessary ingredient. In Abdul Bakshi Brothers, Hyderabad v. State of Andhra Pradesh[1960] 11 S.T.C. 526., a similar question arose. The learned Judges however held that unless the dealer is one who is carrying on a business in the particular category of articles, he cannot be assessed to tax on the purchase of the tanning bark. In that case also, the purchase turnover of tanning bark was liable to tax in the hands of the dealers and the contention that the assessees were not dealers in that commodity was raised. The judgment is very short. The learned Judges merely observed: "It is manifest that emphasis is laid by this rule on the assessee dealing in goods which are enumerated in that rule. It is not enough if he is a dealer in the sense that he carries on some business. For attracting this rule, the assessee must be carrying on business in the particular category of articles specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eems difficult to see why the purchase should be deemed to be devoid of the profit motive in an integrated transaction of that nature. Again, goods have also been defined to mean "all kinds of movable property" other than excepted items and to include "all material commodities and articles including those to be used in the fitting out, improvement or repair of movable property". If therefore the goods which the assessee purchases are goods which he utilises for the purpose of improvement of other movable properties which he sells, reading the definitions of "dealer" and "goods" together, it would appear to follow that the purchase itself is in the course of the business, whether the identical goods as purchased are sold or not. We may instance the purchase of groundnut. Groundnut is taxable on purchase and it has never been contended as far as we are aware that because groundnut is consumed in the process of manufacture of oil and the assessee is a dealer in oil in the sense that he sells that oil and does not sell the groundnut as such, the purchase of groundnut is not in the course of the business of the dealer. Giving the matter careful attention, we are not satisfied that by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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