TMI Blog1982 (9) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers have not suffered tax. While so, the Assistant Commissioner of Commercial Taxes, Enforcement, issued a notice to the petitioners on 19th January, 1982, to appear before him with all their accounts relating to purchase of raw materials effected by them commencing from 1st April, 1977. The petitioners sent a reply to the Assistant Commissioner on 2nd February, 1982, informing him that they do not trade in any goods but they construct and sell flats, that they are not registered dealers and that section 6-A of the Act cannot be invoked to assess the petitioners under the Act. After receipt of the reply, the Assistant Commissioner issued a notice on 16th March, 1982, under section 28 of the Act directing the petitioners to file the details relating to purchase of raw materials effected by them for the period commencing from 1st April, 1977 and also to produce all books of account and purchase bills for the above period on 22nd March, 1982. Summons in form IX for production of accounts and purchase invoices on the aforesaid date for the years 1977-78 to 1980-81 as prescribed under rule 56 of the A.P.G.S.T. Rules, 1957, were also enclosed and the petitioners were threatened w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d dealer, and (a) either consumes such goods in the manufacture of other goods for sale or otherwise, or (b) disposes of such goods in any manner other than by way of sale in the State, or (c) 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, shall pay tax on the turnover relating to purchase aforesaid at the same rate at which but for the existence of the aforementioned circumstances, the tax would have been leviable on such goods under section 5 or section 6." Liability to pay tax is created by this charging section. To incur the liability the conditions requisite are: (1) The person must be a dealer as defined in the Act. (2) He must have purchased goods from a registered dealer under such circumstances that no tax is payable thereon; or he must have purchased goods from an unregistered dealer and must have either consumed such goods in the manufacture of ther goods or disposed of such goods either within or outside the State. The learned counsel for the petitioners submits that the petitioners are not dealers within the meaning of section 2(1)(e) of the Act. Section 2(1)(e) de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... desh v. H. Abdul Bakshi [1964] 15 STC 644 (SC) held: "But to be a dealer a person need not follow the activity of buying, selling and supplying the same commodity. Mere buying for personal consumption, i.e., without a profit-motive, will not make a person dealer within the meaning of the Act, but a person who consumes a commodity bought by him in the course of his trade, or use in manufacturing another commodity for sale, would be regarded as a dealer." In State of Madras v. Gannon Dunkerly Co. [1958] 9 STC 353 (SC) the Supreme Court held: "In the case of a building contract the property in materials used does not pass to the other party to the contract as movable property. It would so pass if that is the agreement between the parties. But if there is no such agreement and the contract is only to construct a building, then the materials used therein would become the property of the other party to the contract only on the theory of accretion." The Supreme Court in Ganesh Prasad Dixit v. Commissioner of Sales Tax, Madhya Pradesh [1969] 24 STC 343 (SC) while considering the question whether the building contractors are dealers or not held that "a person to be a 'dealer' with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 5A(1)(a) of the Kerala General Sales Tax Act, 1963. Answering the question-is the pineapple fruit consumed in the manufacture of pineapple slices?-the Supreme Court observed: "The learned counsel for the revenue contends that even if no manufacturing process is involved, the case still falls within section 5A(1)(a) of the Kerala General Sales Tax Act, because the statutory provision speaks not only of goods consumed in the manufacture of other goods for sale but also goods consumed otherwise. There is a fallacy in the submission. The clause, truly read, speaks of goods consumed in the manufacture of other goods for sale or goods consumed in the manufacture of other goods for purposes other than sale." The Karnataka High Court in Reliable Rocks Builders and Suppliers v. State of Karnataka [1982] 49 STC 110, while construing section 6(i) of the Karnataka Sales Tax Act which is identical to section 6-A(ii) of the Act held that the process of breaking boulders into jelly cannot be described as a manufacturing process. The learned Government Pleader however invited our attention to the decision in Ganesh Prasad Dixit v. Sales Tax Commissioner, Madhya Pradesh [1969] 24 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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