TMI Blog1962 (12) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... nt preferred an appeal, and the Judge (Appeals) found that the applicant had decided to close its business on account of losses and debts, and that the factory and mines were actually closed and a decision was taken to sell off the assets. He held that the sale of the machinery, which was a part of the capital assets of the business, was not effected with a view to carry on any business but merely for the purpose of liquidating the debts, and that the transfer of such machinery could not be treated to be a "sale" within the meaning of the Act. He accordingly allowed the appeal and set aside the assessment order. The Commissioner of Sales Tax applied in revision to the judge (Revisions) who held that even though the machinery was not "ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of dealing in machinery. He further contended that inasmuch as the applicant had closed down its manufacturing activity, it had ceased to do any business and could no longer be said to be a "dealer" under the Act. On behalf of the Commissioner of Sales Tax, it is urged that inasmuch as the applicant was admittedly a dealer, being engaged in the business of manufacturing and selling chemicals, it was a dealer in respect of all commodities sold by it, whether they were sold in the ordinary course of its business or outside such business. In any event he contends, the machinery was connected with the applicant's business, being part of the assets of the business, and, therefore, the sale proceeds could be included in the turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Steelage Industries Ltd. v. State of Bombay[1957] 8 S.T.C. 376. There the assessee was carrying on business as a dealer in steel furniture. It sold a motor-car. The question which fell to be determined was whether the price received for the sale of the motor-car could be included in the taxable turnover of the assessee for the purpose of determining its sales tax liability. Shah, J., who delivered the judgment of the Court, observed: "But the sale of the motor-car purchased by them initially for the use of their managing director was not a sale in the course of the business of the assessees. The expression 'dealer' having been defined by the Legislature as meaning a person who carries on the business of selling or supplying goods and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and retail business of selling separated parts of ship machinery and other articles. A ship was purchased by the dealer with an option of either using the ship for trading or breaking it and selling it as separated parts. Thereafter, the applicant entered into an agreement with a company of Costa Rica to sell that ship to that company and one of the clauses in the agreement enabled the Costa Rica Company either to use the vessel for trading or to break it up. It was held that the activity of the dealer selling the ship to the foreign company was closely connected with and was akin to the normal course of his business activity. At page 888, Tambe, J., observed: "These circumstances clearly indicate that the applicant had purchased the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant has not pressed for an answer to the first question so far as it relates to the packing materials and other commodities. In view of our answer to the first question, the second question does not arise. The question was framed with reference to the contention of the applicant that the sale of machinery and of packing materials were not liable to be taxed as the business had been closed. The applicant is entitled to its costs which we assess at Rs. 100. A copy of this judgment under the seal of the Court and the signature of the Registrar shall be sent to the Commissioner of Sales Tax, U.P., and the Judge (Revisions) Sales Tax, as required by section 11(6) of the U.P. Sales Tax Act, 1948. Reference answered accordingly. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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