TMI Blog1988 (2) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... -------------------------------------------------------- Rs. Rs. 1. Sale of application forms. 56,500-00 1,60,336-00 2. Sale of tender forms. 6,400-00 24,441-00 3. Cost of registration plans. 4,600-00 6,351-00 4. Sale of dismantled material. 67,200-00 4,212-00 5. Sale of empty cement bags. 43,400-00 60,606-00 --------------------- 1,78,100-00 2,55,848-00 --------------------- The Commercial Tax Officer, accordingly levied a tax of Rs. 5,495 and Rs. 9,629 respectively for the assessment years 1973-74 and 1975-76. We may at this stage indicate that the assessment orders are brief and do not contain any reasons for regarding the respondent as a "dealer" under the Act and taxing the aforesaid sales in the hands of the respondent. All that is stated in the assessment order is: "According to the annual account it is found that Andhra Pradesh Housing Board has effected sale of scrap, etc., besides sales of house construction by the Board. The sales of scrap, etc., is liable to tax as per the Supreme Court judgment in the case of District Controller of Stores, Northern Railway, Jodhpur v. Assistant Commercial Taxation Officer [1976] 37 STC 423." Aggrieved by the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hindu [1978] 41 STC 105 in support of the proposition that the respondent must be held to be carrying on business when the respondent sold old, unused and unserviceable materials. Learned Government Pleader also relied on the decision of the Madras High Court in Commissioner of Commercial Taxes v. Evangelical Literature Service, Madras [1974] 33 STC 325. Our attention has also been invited to the unreported judgment of a Division Bench of this Court in T.R.C. Nos. 76 and 77 of 1975 dated 25th March, 1976 and to yet another unreported decision of a Division Bench of this Court disposing of W.P. Nos. 5189, 5190 and 5191 of 1977 and batch dated 9th December, 1980. Learned Government Pleader sought to urge that what was sold by the respondent was not "old and unserviceable forms". According to the learned Government Pleader the respondent sold application forms for allotment of houses, tender forms, registration plans, etc., and realised money on the sales of those forms and these sales were subjected to tax. Learned Government Pleader also pointed out that the sale of dismantled materials pertain to the housing construction. We may straightaway point out that the above submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Board undertakes works for the framing and execution of housing schemes considered necessary from time to time or may be entrusted to it by the Government. There is no provision in the Act which would warrant a finding that the Housing Board is engaged in trade or commerce as is generally understood. Inasmuch as the Government, in the course of its activities, finds it necessary to promote a number of housing schemes, as a welfare measure or otherwise, the Housing Board is established to act as a convenient medium through which the works are executed. In order to render the Board of Trustees liable, it must be a "dealer" carrying on business of buying, selling, supplying or distributing goods. It should also be possible to say that the Board is carrying on business satisfying the requirements of section 2(1)(bbb) of the Act. Unless it is possible to say that the Housing Board is a "dealer" within the meaning of the Act, and is carrying on business, no tax can be levied on the Housing Board. We may notice the definition of "dealer" in section 2(1)(e) of the Act: " 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch trade, etc., is carried on or undertaken with a profit-motive. The Government Pleader invited our attention to the decision of the Supreme Court in District Controller of Stores v. Assistant Commercial Taxation Officer [1976] 37 STC 423. Reliance is placed by the Government Pleader on the following observations of Mathew, J.: "We think that the activity of the appellant in the selling of unserviceable material and scrap-iron, etc., would be 'business' within clause (i) of the definition of the word 'business' introduced by the amending Act. The word 'business' according to clause (i) of that definition would include any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacture whether or not it is carried on with a motive to make gain or profit. So even if it be assumed that the activity involved in selling unserviceable material and scrap-iron, etc., would not amount to carrying on business in the normal connotation of that term, it would be 'business' within clause (i) of that sub-clause as introduced by the amending Act." An identical question arose in Board of Trustees of the Visakhapatnam Port Trust v. Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us Bombay Sales Tax Act, which was similar to that under the Madras Sales Tax Act, prior to its amendment in 1964, the sale of scrap does not necessarily lead to an inference that business which was an element in determining the liability of the dealer for the turnover in such goods was intended to be carried on in those goods. This court had observed, it cannot be presumed that when the goods were acquired, there was an intention to carry on business in those discarded materials nor are the discarded goods, by-products or subsidiary products or are produced in the course of manufacturing process; that they are either fixed assets of the company or are goods which are incidental to the acquisition or use of stores or commodities consumed in the factory and that when these go into the profit and loss account of the business and may indirectly be said to reduce the cost of production of the principal item, the disposal of those goods on the account cannot be said to be part of or incidental to the main business of selling textiles. As the scrap in that case was not held to be incidental to the acquisition or use of stores or commodities consumed in the factory, the turnover was not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as that the canteen was run as an integral and inseparable part of the activity carried on by the assessee and it is not possible to isolate it from the main activity and treat it as business for the purpose of the Act. The contention was accepted by the Division Bench. Reference was made in this case also to the decision of the Supreme Court in the District Controller of Stores v. Assistant Commercial Taxation Officer [1976] 37 STC 423. The Bench, however, referred to the earlier judgment in the Port Trust case in [1979] 43 STC 36 (AP) and held that the main thrust of the judgment is that having regard to the statutory objects for achieving which the Visakhapatnam Port Trust was established, it cannot be said to be a dealer. We have referred to the objects for which the respondent-Housing Board was established. Having regard to these objects, we are unable to say that the Board can be regarded as a dealer carrying on business within the purview of the Andhra Pradesh General Sales Tax Act. In our opinion, the aforesaid two Bench decisions of this Court in the Port Trust case [1979] 43 STC 36 and Base Repair Organisation case [1983] 53 STC 223 properly explain the ratio of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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