TMI Blog2010 (7) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the Karnataka Appellate Tribunal confirming the findings recorded by the authorities holding that the petitioner is liable to pay purchase tax under section 6 of the Karnataka Sales Tax Act, 1957 (for short, hereinafter referred to as, the Act ). The petitioner is a dealer registered under the provisions of the Gujarat Sales Tax Act, 1969 and also under the provisions of the Central Sales Tax Act, 1956. The registration certificate produced as annexures K and L discloses that he is carrying on the business as reseller . Further it is disclosed that he is carrying on the business of resale of ball bearing copper wire. He is not registered as a dealer under the Karnataka Sales Tax Act, 1957. In pursuance of the notice of sale of assets of M/s. Powerflow Ltd., Bangalore, issued and published in the Economic Times dated September 3, 2003 by the official liquidator attached to the High Court of Karnataka, the petitioner made a bid. The petitioner was declared the successful bidder for the plant and machinery by virtue of an order passed by this court in O.L.R. No. 89 of 2004 confirming the sale of machinery which was handed over to the petitioner on March 13, 2004. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 6 is attracted. On the other hand, section 6 has no application to a case of solitary transaction and in support of this contention he relied upon various judgments of the apex court and held that when admittedly the transaction in question being a solitary transaction, section 6 is not attracted and therefore, these three authorities have committed a serious error in not properly understanding and appreciating the true purport of section 6 of the Act and therefore, he submits that the order requires to be set aside. We have heard the learned counsel for the parties. The short question that arises for consideration in this appeal is as to, whether the purchase by the petitioner is in the course of his business or not. The law on the point is fairly wellsettled. In this context, it is relevant to peruse the observations made by the honourable Supreme Court in the case of State of Gujarat v. Raipur Manufacturing Co. Ltd. reported at [1967] 19 STC 1, wherein their Lordships have observed as follows (page 1 in 19 STC): Whether a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while inter preting the meaning of the word business as finding place in Manipur Foodgrains Dealer Licensing Order, it was held that mere selling of articles or storing of the same would not make it a business, as this concept postulates continuity of transaction. It was stated that a casual solitary transaction would not make a person a dealer. There being nothing on record to show if there was continuity in transac tions of sale of coal dust or rejected coal by the respondent, we agree with the High Court that the respondent was not in the business of sale or storage for sale of coal. What has been stated in the concluding part of the definition of 'dealer' also lends assurance to the view taken by the High Court. Another Bench of the honourable Supreme Court in its judgment rendered in the case of State of Tamil Nadu v. Thiru Murugan Brothers [1988] 68 STC 412 (SC) has stated hold as under (page 413 in 68 STC): (ii) that, however, since the respondent was a dealer i publicity material who had been constrained to part with the unfinished film, it was a solitary transaction, neither in the course of the respondent's business nor with a profitmotive. The trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of his activity. In the case of Commissioner of Incometax v. Lahore Electric Supply Co. Ltd. [1966] 60 ITR 1 (SC); AIR 1966 SC 843, Sarkar J., speaking for the majority, observed that business as contemplated by section 10 of the Indian Incometax Act, 1922, is an activity capable of producing a profit which can be taxed. In the case of the appellanttrust the activity of the trust, as already observed earlier, has in fact been yielding profits and that apparently accounts for the increase in the value of its assets. Further, in the case of Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue, West Bengal [1967] 20 STC 398 (SC), the honourable Supreme Court was of the opinion that (page 405 in 20 STC): . . . To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profitmotive; there must be some real and systematic or organised course of activity or conduct with a set purpose of making profit. . . There cannot be any quarrel in respect of the aforesaid legal proposition. A single, casual or a solitary transaction of sale or purchase would not make a person a dealer wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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