TMI Blog1983 (10) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... able turnover of the assessee. Being aggrieved by this, inter alia, other findings of the assessing officer, the assessee filed first appeal before the Appellate Deputy Commissioner of Sales Tax, Gwalior, and vide his order dated 16th February, 1975, he confirmed the finding of the assessing officer that the sum of Rs. 5,866 in question, was exigible to tax. Thereupon, the assessee filed a second appeal before the Tribunal. The Tribunal, vide its order dated 2nd June, 1975, allowing the appeal of the assessee with regard to the point in question, held that the sum of Rs. 5,866 was not exigible to tax. The relevant part of the finding of the Tribunal is contained in paragraph 5 of its order, which reads as under: "Therefore, after 15th April, 1965, a frequent, continuous activity which is large in volume and is undertaken without a motive to make profit may also be business. In State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. [1973] 31 STC 426 (SC) the Supreme Court held that in view of the amended definition of the term 'business' in the Madras General Sales Tax Act, 1959, which largely corresponds to the definition inserted in the M.P. General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inuity and regularity in the sale of the articles in question and if that is not there, the transaction in question cannot be held to have a nexus with the business of the assessee. He relied strongly in support of his argument on a decision of the Supreme Court in Board of Revenue v. A.M. Ansari [1976] 38 STC 577 (SC); AIR 1976 SC 1813. He further submitted that the decision in Ratlam Strawboard Mills' case [1984] 55 STC 194; 1983 Cur TJ 78 cannot be relied upon to support the case of the department as it has taken a view without noticing the Supreme Court's judgment in Ansari's case [1976] 38 STC 577 (SC); AIR 1976 SC 1813 and the view taken is contrary to the Supreme Court's judgment in Ansari's case [1976] 38 STC 577 (SC); AIR 1976 SC 1813. He also relied on a decision of this Court in Commissioner of Sales Tax v. Synthetics Ltd. [1982] 49 STC 22. 7.. The decision of the question calls for the interpretation of the term "business" as defined in section 2(bb) of the Act. It reads thus: "(bb) 'Business' includes- (i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or incidental to a trade or business when it is not necessary thereto or a primary part thereof, e.g., the business of a railway company is primarily that of carriage of passengers or goods, and it is not responsible for a contractor it employs to build, repair and paint its stations, because such work is merely ancillary, or incidental to, and is no part of its business (See Pearce v. London South Western Railway [1900] 2 QB 100). A work is properly called ancillary to a business where you are describing something auxiliary appurtenant to the purpose for which the business is carried on (See Green v. Britten [1904] 1 KB 356). It would also be pertinent here to refer to a decision in Thurogood v. Bandan [1951] 2 KB 537, wherein it has been held that the testing of machinery used in the manufacture of a product such as margarine is incidental to the manufacture. 11.. The articles in question are the containers of the articles that are received obviously as and when required for the essential purpose of running the business of manufacture of the assessee and these containers, after emptying them, are sold. In this view of the factual position, in the backdrop of the meaning of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is in that context that their Lordships held: "20. In order that the sales tax should be payable by the respondents in accordance with the obligation imposed on them by clause (23) of the sale notice, it is necessary that the Government of Andhra Pradesh should have been carrying on the business of selling the forest produce. In State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 STC 1 (SC); AIR 1967 SC 1066 this Court while examining the term 'business' in another context observed that whether a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transactions must ordinarily be entered into with a profit-motive. The Court further went on to observe that when a subsidiary product is turned out in the factory of the assessee regularly and continuously and it is being sold from time to time, an intention to carry on business in such product may be reasonably attributed to the assessee. As the consideration of profit-motive cannot be regarded as an essential constituent of the term 'business' in view of the amendment introduced in the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is connected with or incidental to or ancillary to the main business of the assessee, then such transaction is 'business' within the definition of that expression in section 2(bb) of the Act. The decision in Cementation Patel (Durgapur) v. Commissioner of Commercial Taxes, West Bengal [1981] 47 STC 385 is distinguishable on facts. In that case, it has been held that if the main business of a person is such that he cannot be held to be a 'dealer' in respect of such business, then the transactions connected with or ancillary to such business, though in the nature of sale, will not make the person concerned a 'dealer'. 7.. As already observed, in the instant case, the assessee has not ceased to carry on its business of manufacture and sale of strawboards. The old plant and its accessories were acquired by the assessee for that business, and therefore, though sale of plants and their accessories is not the business of the assessee, the transaction of sale of an old plant and its accessories is covered by the enlarged definition of 'business' under the Act and such transaction has taken place in the course of the main business of the assessee. In our opinion therefore, the sale tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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