TMI Blog2003 (2) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 crores. The official liquidator then filed C.A. No. 293 of 2002 before the company court to direct the first respondent herein to meet the expenses of any cess or sales tax, etc., if any become payable on transportation of the materials anywhere since the official liquidator is not collecting or remitting any sales tax at the time of the sale of the assets of the company. C.A. No. 333 of 2002 was filed by the first respondent for clarifying that they are not liable to pay tax on the purchase of goods covered by lot No. 1-2 under the Kerala General Sales Tax Act. Remaining Lot Nos. I-1, I-3, I-4 and I-5 were bid in auction by the third respondent herein for Rs. 13.76 crores. 3.. The question mooted before the learned company Judge was whether on the sale effected by the official liquidator, sales tax would be attracted. After passing the order in C.A. No. 293 of 2002 and connected matter on 30th October, 2002 the purchaser had only remitted the bid amount to the official liquidator. On the question whether official liquidator is duty-bound to collect sales tax, learned Government Pleader was also heard by the company Judge. After considering all aspects of the matter learned com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la General Sales Tax Act. The official liquidator is only a Central Government officer attached to the honourable High Court. He was appointed to attend the work of winding up of the company. The duty of the official liquidator in a winding up proceedings is to dispose of the assets, movable or immovable, and realise the maximum amount and to disburse that amount among the creditors of the company, secured creditors, workmen creditors and other creditors, etc. Since the official liquidator is not selling any properties belonging to the Central Government or collecting any amount for the Central Government it cannot be said that he is conducting the sale on behalf of the Central Government. Further the sale conducted by the official liquidator with the sanction of this Court is not for profit making or in the course of business. 6.. The Kerala General Sales Tax Act defines the expression "dealer" under section 2(viii) of the Act which reads as follows: "'Dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso the expression "carrying on business" and held the port trust was not constituted by Parliament to carry on business. The court further held as follows: "We now come to the second category of cases cited for the respondent, port trust where the main activity of the person or body does not amount to carrying on business. If that be the case the activities will stand far removed from any business. Let us assume that such 'non-business' activities might result (say) in some scrap or unwanted material which should be cleared so that accommodation could be saved. If the sales were then made with an intention to reduce the congestion and not with the intention of running an independent business in the scrap or unwanted material, then would they be liable to sales tax? If in such situations, the activities of sale of the scrap or unwanted material were only a very infinitesimal part of the activities when compared with the main 'non-business' activity, could they be brought under the tax net? In our view, if the main activity was not 'business', then the connected, incidental or ancillary activities of sales would not normally amount to 'business' unless an independent intention t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of "dealer" under section 2(11) of the Act. The Madras Port Trust case [1999] 114 STC 520 (SC); (1999) 2 JT 410 (SC) was also considered by the apex Court in Sai Publication case [2002] 126 STC 288; (2002) 3 JT 295 (SC). 7.. The principle laid down by the apex Court in the above mentioned decisions would show that the primary and dominant activity of the person or concern has to be looked into in order to determine whether they would fall within the meaning of dealer. In the Port Trust case [1999] 114 STC 520 (SC); (1999) 2 JT 410 (SC) it has been found by the apex Court that if the main activity was not business, then the connected, incidental or ancillary activities of sales would not normally amount to business unless independent intention to conduct business in these connected, incidental or ancillary activities is established by the Revenue. The above mentioned case also would establish that in such situation presumption would be that these connected, incidental or ancillary activities of sales are not business and the onus of proof of an independent intention to do business in these connected, incidental and ancillary sales would rest on the department. 8.. We may exami ..... 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