TMI Blog1996 (7) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of a 'dealer'? The Tribunal after examining the provisions of Delhi Sales Tax Act (for short 'the Act') in particular Section 2(c) defining 'business' and Section 2(e) defining 'dealer', observed that a person is not a dealer unless he carries on business of selling goods. Considering the objects of establishing Dtc and various decisions including the decision of the Supreme Court in State of Tamil Nadu Vs.Burmah Shell Oil Co.Ltd., 31 Stc 426(SC) the Tribunal held that the sale of unserviceable goods, scrap or junk by Dtc cannot be said to be 'business' defined in Section 2(c) of the Act because it is not the pre-dominant or primary object of DTC. It held that the goods purchased by Dtc in the shape of buses, tools and ancillary items or other articles in the way of rendering the transport services were not purchased with the intention of reselling them but only to use them to carry out or execute the job assigned to it. The Tribunal came to the conclusion that the sale of these articles after use as and when rendered unserviceable may be considered to be incidental or ancillary to the main activities of the Corporation but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintain anything which is not required directly or indirectly for use for the purpose of undertaking of the Corporation. It also cannot provide any service for or repair any vehicle which does not belong to the Corporation or is not used directly or indirectly for the purpose of the undertaking. The Corporation also cannot purchase any vehicle for the purpose of sale to another person nor can it sell or supply to any person lubricants, spare parts, equipment or accessories. The Corporation is also not authorised' to let vehicles on hire for the carriage of passengers or goods except as expressely provided for under this Act. The relevant provisions of this Act may be reproduced as under :- 18.It shall be the general duty of a Corporation so to exercise its powers as progressively to provide or secure or promote the provision of an efficient, adequate, economical and properly co- ordinated system of road transport services in the State or part of the State for which it is established and in any extended area. 19(1) Subject to the provisions of this Act, a Corporation shall have power - a) to operate road transport services in the State and in any extended area; b) to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of sale to another person; iii. to sell or supply to any person lubricants, spare parts, or equipment for or accessories to vehicles; iv. to let vehicles on hire for the carriage of passengers or goods except as expressly provided by or under this Act. 4)........ 5)........ 6)........ For facility of reference we may also reproduce Section 2(c) and (e) of the Act as under- 2(C) 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, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture adventure or concern; and (ii) any transaction in connection with or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; (e) dealer means any person who carries on business of selling goods in Delhi and includes - (i) the Central Government or a State Government carrying on such business; (ii) an incorporated society (including a co-operative society), club or association which sells or supplies goods, whether or not in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier decision in the case of State of Andhra Pradesh Vs.M/s.Abdul Bakshi and Bros 15 Stc 644(SC) holding that a person to be a dealer must be engaged in the business of buying or selling or supplying goods and held that the expression 'business' though extensively used in the Taxing statutes, is a word of indefinite import. In taxing statute, it is used in the sense of an occupation or profession which occupies the time, attention and labour of a person, normally with the object of making profit. To regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive, and not for sport or pleasure. Whether a person carries on AFTERamendment 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. By the use of the expression profit motive it is not intended that profit must in fact be earned. The Supreme Court also held that where a person in the course of carrying on a business is required to dispose of what may be called as fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation, Hyderabad Vs.Commercial Tax Officer, Hyderabad, 27, Stc 42. After noticing the object of Andhra Pradesh State Road Transport Corporation constituted under Road Transport Corporation Act, 1950, namely, to provide or secure the provision of an efficient, adequate, economical and properly coordinated system of road transport in the State, the High Court held that the State Corporation could not be held to be carrying on business of selling the discarded vehicles or other scrap which has come into its possession in the course of its activities. The High Court relied upon the decision of the Supreme Court in Raipur Manufacturing case for coming to the conclusion that a person who sells goods which are unserviceable or unsuitable for his business does not on that account become a dealer in those goods unless he has intention to carry on the business of selling those goods. It seems that the High Court came to the conclusion as it did in view of absence of intention of the Transport Corporation to carry on the business of selling discarded vehicles and other scrap. (7) The aforesaid decision was considered by the Supreme Court in the case of Burmah Shell (supra). The Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved by the Supreme Court holding that the said decision has not taken note of the word 'such' in the second sub clause, which, in the view of the Supreme Court, imports by reference the definition in sub clause (i) into that of sub clause (ii). The Supreme Court cited with approval decision of Andhra Pradesh High Court in the case of The Hyderabad Asbestos Cement Products Limited and another Vs.The State of Andhra Pradesh and others, 30 Stc 26 where similar question came up for consideration on the analogous provision of Andhra Pradesh Sales Tax Act, The High Court, in view of the definition of 'business' as amended by Amendment Act of 1966, held that proof of profit motive is unnecessary to constitute 'business' and the transaction of supply of food and drink to the workmen of the Canteen maintained by the assessee in pursuance of the Factory Act and the Rules, were sales and constituted 'business' for the purpose of the Act. The Supreme Court held that the view adopted in Hyderabad Asbestos by the Andhra Pradesh High Court is in consonance with the definition of 'business'. (9) Dealing with the aforesaid aspect and the case of Hyderaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the nature of activities being carried on by Burmah Shell, that it was a 'dealer' and further held the turnover to be taxable but at the same time considering the object of Andhra Pradesh State Road Transport Corporation and Road Corporation Act, 1950, the decision of the High Court in A.P. State Road Transport Corporation Vs. Commercial Tax Officer, 27 Stc 42, was approved by Supreme Court inspite of the fact that the definition of the expression 'business' which was considered by Andhra Pradesh High Court in 27 Stc 42 was similar to the definition of expression 'business' in Madras Sales Tax Act after its amendment in 1964. In the present case, we are concerned with the assessee whose objects are almost similar to Andhra Pradesh State Road Transport Corporation and which has also been set up under Road Corporation Act, 1950. (11) On behalf of the Revenue strong reliance has,however, .been placed on a later decision of the Supreme Court in the case of The District Controller of Stores, Nor them Railway, Jodhpur Vs.The Assistant Commercial Taxation Officer and another, 37 Stc 423(SC). In this decision the Apex court held that the activity of Railways ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. In this case, the question was regarding the taxability of sales of unclaimed and unconnected goods under the provisions of Section 56 of Indian Railways Act by the Eastern Railways and whether Eastern Railways was a dealer within the meaning of section 2(c) by Bengal Finance (Sales Tax)Act, 1941. What we have stated above regarding 37 Stc 423 would be applicable to this case as well. (13) Now we may also notice some judgments of the High Courts where after considering both the aforesaid decisions of the Supreme Court, it was held that the assessee was not carrying on business within the meaning of the concerned Sales Tax Act and was not a 'dealer' while selling discarded and unserviceable material. The definition of expression 'business' is almost similar in these Sales Tax Statutes. In State of Andhra Pradesh Vs.Andhra Pradesh State Road Transport Corporation, 74 Stc 336 it was held that the activities of Transport Corporation do not constitute business within the meaning of Section 2(l)(b)(b) of the Andhra Pradesh General Sales tax Act and,therefore, it could not be a dealer within the meaning of section 2(1) (e) of the said Act, and that the sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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