DEPUTY COMMISSIONER OF SALES TAX LAW BOARD OF REVENUE TAXES ERNAKULAM SPECIAL LEAVE PETITION AGAINST THIS JUDGMENT Vs. K GOPINATHAN NAIR AND COMPANY

JUDGEMENT

(1.) THESE 29 revisions are filed by the State of Kerala. The respondents are cashew dealers. They are assessees under the Kerala General Sales Tax Adt, 1963. It is common ground that all the assessments, which are the subject-matter of dispute in these revisions, relate to assessment years prior to 1974. While effecting assessments of the respondents (assessees), the assessing authority included the proceeds of discarded items like empty tins, cashew shells and gunnies, to the taxable turnover. The objection of the respondents that they are not dealers in these items and so the turnover under these items are not includible in the taxable turnover, was negatived by the assessing authority, as well as by the first appellate authority. The Sales Tax Appellate Tribunal, placing reliance on the decision of this Court reported in Deputy Commissioner of Sales Tax v. Carborundum Universal Ltd. [1981] 47 STC 73 held that for the turnover relating to discarded items like empty tins, cashew shells, gunnies, etc. , the assessees should be given exemption. The Revenue has come up in revisions from the orders passed in second appeals by the Sales Tax Appellate Tribunal.

(2.) WE heard counsel for the Revenue, Mr. T. Karunakaran Nambiar and also counsel for the respondents, Mr. Arikkat Vijayan Menon. Counsel appearing on both sides agreed that the sole question involved in all these revisions is whether the respondent's turnover relating to the discarded items, like cashew shells, gunnies and empty tins, is exigible to sales tax under the Kerala General Sales Tax Act. The answer to the question will depend upon the fact as to whether the respondents can be considered to be dealers under the Kerala General Sales Tax Act as regards the said items. Section 2 (viii) of the Kerala General Sales Tax Act defining the word "dealer" and section 2 (vi) of the Kerala General Sales Tax Act defining the word "business" as they existed before the amendment made, by Act 22 of 1974, are relevant in this regard. Under section 5 of the Act it is only the taxable turnover of a dealer over a particular limit, that is brought to tax. Section 2 (viii) and (vi), before the amendment by Act 22 of 1974 was as follows : " (viii) 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes -" " (vi) 'business' includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, with or without profit-motive in such trade, commerce, manufacture, adventure or concern. " By Act 22 of 1974, the definition of the word "business" was recast as follows : " (vi) 'business' includes, - (a) 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 profit accrues from such trade, commerce, manufacture adventure or concern; and (b) any transaction in connection with, or incidental or ancillary to such trade, commerce, manufacture, adventure or concern. "