TMI Blog1978 (4) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1st April, 1950, to 31st March, 1951, the applicant failed to submit return of sales tax within the time as prescribed under the Act. In answer to the notices served by the successive Commercial Tax Officers, 24-Parganas, the applicant claimed that no sales tax was payable by it as it was not a dealer within the meaning of section 2(c) of the Act. The applicant claimed further that it was engaged in disposing of surplus stores of the Government of India pursuant to and in terms of an agreement entered into by it with the Government. The Commercial Tax Officers concerned rejected the above contentions and completed the assessments for the said periods on the turnover of sales of such surplus stores of the Government of India effected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the disposal of surplus stores belonging to the Government of India. This activity of the dealer was not a business activity of selling or supplying goods. In support of his contentions, Mr. Banerjee cited a decision of the Supreme Court in Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue, West Bengal, Calcutta[1967] 20 S.T.C. 398 (S.C.); A.I.R. 1967 S.C. 1826. The facts in this case were, inter alia, that the Government of India set up an organisation known as the Directorate of Disposals (United States Transfer Directorate) to dispose of war equipments taken over from the American forces after the Second World War. A part of such equipments was appropriated by the Government itself for their own use. Some equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement between the Imperial and Commonwealth Governments for the purpose of selling the surplus of the stocks of wool acquired during the Great War. The question arose whether it was carrying on a trade or whether it was realising its capital assets. The Privy Council held that the surplus resulted merely from the realisation of capital assets and no part of it was-income chargeable to tax. Mr. Sanjay Bhattacharya, the learned counsel for the Board, has contended, on the other hand, that Tata Aircraft Ltd. was admittedly carrying on a business for profit. The activities of this business consisted of selling goods on behalf of the Government of India and the transactions in this business were clearly exigible to sales tax. Mr. Bhattacharya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are engaged in? I confess I should have thought it capable of strong argument that they were carrying on a trade, because it is not essential to the carrying on of trade that the people carrying it on should make a profit, nor is it even necessary to the carrying on of trade that the people carrying it on should desire or wish to make a profit. The definition of trade, though it is perfectly true that trade, it may be in ninety-nine cases out of one hundred, does as a matter of fact include the idea of profit, yet the mere word 'trade' does not necessarily mean profit to be made by the seller to the buyer, or by the buyer from the seller, not at all. But putting aside trade, how can it possibly be denied that these gentlemen carry on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion arose whether the supply of fertilisers by the Corporation to the State Government of Kerala or its nominees constituted sales and, therefore, attracted sales tax under the Kerala General Sales Tax Act, 1963. It was contended by the Corporation that the Control Order ruled out any volition in the transactions and any freedom of contract and, therefore, the transactions could not be held to be sales. On a reference, the Kerala High Court held that, as the petitioner was functioning as the agent of the Central Government in effecting the supply and distribution of fertilisers, under explanation (2) of sec. tion 2(viii) of the relevant Act, the Corporation would be deemed to be a dealer for the purpose of the statute. It was found furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lments. (g) For services in connection with sale and disposal a lump sum fee of a minimum of Rs. 10 lakhs on all sales and disposals plus an additional selling agency fee of 5 per cent of the aggregate net realisations on all sales and disposals in excess of Rs. 5 crores, to be paid by stipulated instalments. It is clear from the aforesaid that the applicant as the agent of the Government disposed of surplus war materials. In the case of Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue, West Bengal[1967] 20 S.T.C. 398 (S.C.); A.I.R. 1967 S.C. 1826., the Government of India was carrying on the same activity through the agency of the Directorate of Supplies and Disposals and it was held that the said transactions w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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