TMI Blog1984 (3) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, inter alia, sold the following items: (i) old newspapers which had remained unsold, (ii) cuttings obtained from rolls of newsprint which could not be used for the purpose of printing, and (iii) waste newsprint obtained due to damage caused in transit or due to newsprint getting torn or spoilt in the process of printing and jelly, kachara, core-ends and reel-ends. 3.. As far as old newspapers were concerned, the undisputed position before the Tribunal was that these were newspapers which had been printed but remained unsold and therefore, had to be disposed of as waste paper. The Tribunal came to the conclusion that these could not be regarded as a by-product or subsidiary product which was obtained by the assessee during the manufacturing process and the sale of the same could not be held to be a part of the assessee's business. The Tribunal held that the sales of these old newspapers were not in the course of the assessee's business and were not liable to the levy of sales tax. As far as newspaper cuttings are concerned, it was held by the Tribunal that these cuttings were obtained regularly and continuously by the assessee in the printing of newspapers and were sold f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the revenue, is that the sales of waste newsprint and old newspapers by the assessee in this case were in the regular course of the assessee's business and hence the sales of these items were liable to be included in the taxable turnover of the assessee. It was submitted by him that in the course of its business, the assessee regularly obtained waste newsprint as well as retained with it some old newspapers which could not be sold and these had to be sold by the assessee with a fair degree of regularity. The volume of the sales of these items could also not be said unsubstantial. Hence the intention of doing business in the sale of these goods must be attributed to the assessee. It was further urged by him that these products could rightly be regarded as by-products or subsidiary products of the assessee's business of printing newspapers. It was also urged by Mr. Jetly that the sales of these items did result in realisation of money which went either towards increasing the profit of the assessee or reducing its loss and hence the sales of these items were liable to be taxed under the said Act. 6.. It was, on the other hand, contended by Mr. Patil, the learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in that class of goods and the transactions must be ordinarily entered into with a profitmotive. It was further held by the Supreme Court that in the turnover of a person carrying on the business of selling one commodity the price received by him by the sale of another commodity was not liable to be included, unless he carried on the business of selling that other commodity. To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit-motive, and not for sport or pleasure. The Supreme Court held that it cannot be said that in disposing of miscellaneous old and discarded items, such as stores, machinery, iron scrap, cans, boxes, cotton ropes, rags, etc., the respondent-company was carrying on the business of selling those items of goods. These sales were frequent and their volume was large, but it could not be said that when the goods were acquired, there was any intention to carry on the business in those discarded materials nor were the discarded goods, by-products or subsidiary products of or arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on business in selling yarn, cloth, cotton waste, stores, etc. The question was whether the sales of some excess cotton and cotton waste by the assessee in the relevant period were liable to be charged to sales tax. In that case the Division Bench of this Court which rendered the decision placed reliance on the fact the assessee was registered as a dealer in cotton and cotton waste also. It was held by the Division Bench that cotton and cotton waste sold by the assessee could be regarded as subsidiary products of the business of the assessee of manufacturing cotton textiles and the intention of dealing in these goods could be attributed to the assessee with the result that the sales of these goods were liable to the charge of sales tax. In our opinion, this decision does not, in any way, make any difference to the principles laid down by the Supreme Court in the case of Raipur Manufacturing Co. Ltd. [1967] 19 STC 1 (SC). In fact, this decision is referred to by the Supreme Court in the aforesaid decision. It was on the facts of the case, that the Division Bench came to the conclusion that the goods sold were subsidiary products of the assessee's business and the intention to deal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to unserviceable goods referred to by the Supreme Court in the case of Raipur Manufacturing Co. Ltd. [1967] 19 STC 1 (SC), rather than a by-product or subsidiary product. It is not as if it can be regarded as a commercial commodity or product which has emerged in the course of manufacturing or printing of newspapers. In view of this, we fail to see how it can be said that at the time when the assessee purchased newsprint it was with the intention to sell waste newsprint or how it can be said that the assessee was a dealer in that commodity. 11.. As far as old newspapers are concerned, the case of the revenue is even weaker, and in fact, Mr. Jetley fairly did not press his arguments in connection with the sales of old newspapers with his usual zest and vigour. If old newspapers are to be regarded as newspapers, they are expressly excluded from the definition of the word "goods" under the said Act and if they are regarded as newspapers which have remained as unsold and hence not really newspapers, then they are like discarded goods and not by-products or subsidiary products. In either view of the matter, it cannot be said that the sales of old newspapers were liable to the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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