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TMI Blog2009 (3) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... 1980-81 produced before the assessing officer in response to the notice issued under section 12(4) of the OST Act, it was noticed that the opposite party-company had sold old and unserviceable machineries, spare parts and other unserviceable items of machines and tax had not been paid on such sale at the appropriate rate. Tax had been collected at the rate of four per cent and seven per cent on certain goods, which were taxable at the rate of 10 per cent. The Sales Tax Officer, therefore, re-allocated the turnover on this account under different tax rate groups and extra tax on such re-allocation was worked out at Rs. 29,958.72. The matter was carried in first appeal, but the first appellate authority sustained the view taken by the assessing officer. The matter was thereafter carried to the Orissa Sales Tax Tribunal (for short, "the Tribunal") in second appeal. The learned Tribunal relying on the decision in Steel Authority of India Limited v. State of Orissa [1988] 70 STC 2 (Orissa), held that levy of tax on sale of scrap materials and unserviceable materials was not tenable, as there was no material on record to substantiate the continuance in trading activities. Hence, this tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental or ancillary to such trade, commerce, manufacture, adventure or concern. (bb) 'casual dealer' means a person, who has, whether as principal, agent or in any other capacity, occasional transactions of a business nature involving purchasing, selling, supplying or distributing goods in the State whether for commission, remuneration or otherwise. (c) 'dealer' means any person who carries on the business of purchasing, selling, supplying or distributing goods (including goods used or involved in the execution of works contract, whether as goods or in some other form), directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration and includes,- . . . (iv) a casual dealer; . . ." The definition "business" is inclusive one. Only trading, commercial or manufacturing activities or any such adventure or concern would come within the definition of "business". Thus, a person in order to be a businessman should be a trader or a person indulging in commerce or manufacture activities. Transactions, which are inci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31, 1965 were in question. The amendment, which made profit-motive irrelevant and included sales made "in connection with" main business in the definition of "business" came into force with effect from September 1, 1964 in Madras State. In respect of the pre-amendment period, the honourable apex court held that the sale of miscellaneous, old and discarded items could not be treated as part of the activities or carrying on business even if the sales were frequent and their volume was large. But in respect of the period after September 1, 1964 it was held that the addition of the words in section 2(d)(ii) of transaction in connection with or incidental or ancillary to such trade, commerce, manufacture, adventure or concern and the exclusion of "profit-motive" made the definition of "business" wider. It was, therefore, held that the scrap that was sold after August 31, 1964 was "connected with" the business of the company and was liable to sales tax. The honourable Supreme Court in Commissioner of Sales Tax v. Sai Publication Fund [2002] 126 STC 288 (SC), held that inclusion of incidental or ancillary activity in the definition of "business" pre-supposes the existence of trade or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, though the attention of the High Court was not drawn to section 2(bb), on the facts as found by the Tribunal, it was evident that the provisions of section 2(bb) were attracted. The fact that the High Court had ignored a relevant statutory provision could not be a ground for the respondent to contend that the Supreme Court should not also refer to that provision of the Act. The apex court in State of Tamil Nadu v. Board of Trustees of the Port of Madras [1999] 114 STC 520 (SC) held as follows (page 539 in 114 STC): "We agree with the above observations subject to the following clarification or modification. If the main activities are 'business' then the sales in connection with or incidental or ancillary thereto need not have been intended as a business or commercial activity. Their mere connection with or being incidental or ancillary to something else which was 'business' was sufficient to include such sales in the main business. The second part of the last extract starting with the words 'but the converse is not true', is to be modified to mean that if the main activity falling under sub-clause (i) did not amount to business, normally these sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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