STATE OF TAMIL NADU Vs. SARASWATHY KURWATH DAMODARAN

JUDGEMENT

(1.) THE State of Tamilnadu has preferred this Tax Revision Petition under s. 38 of the Tamil Nadu Act No. 1 of 1959 against the order of the Tribunal, dt. 19th January, 1971. THE predecessor-in-interest of the respondent herein was dealing in see foods in Kerala. Under the export promotion scheme he obtained an import licence for import of paper and paper boards in respect of the export of sea foods made by him. He utilised that licence by importing paper and paper boards and sold the same to Basanth Paper house, Madras. THE turnover with reference to this transaction was Rs. 49, 358. 57 and sales-tax was assessed at 2-1/2 per cent thereof. THE dealer preferred an appeal to the AAC and the AAC dismissed the appeal. When the respondent preferred a further appeal to the Tribunal, the Tribunal allowed the appeal. THE Tribunal held that the late Kurwath damodaran being a dealer in sea foods cannot have any intention to carry on business in paper and paper boards and he had to sell such goods as he obtained under import licence and that being a solitary transaction in question cannot be stated to be a sale in the course of business of Kurwath Damodaran, and under those circumstances the transaction not being a sale in the course of business was not taxable under the Act. It is the correctness of this decision of the Tribunal that is challenged by the State.

(2.) A perusal of the order of the Tribunal shows that on behalf of the respondent only three points were urged before the Tribunal. One was that the sale in question is in the course of import and hence not liable to sales-tax under the Tamilnadu General ST Act, 1959. The second was that the sale in question was an outside State sale and therefore not liable to tax under the Tamil Nadu Act. The third was that the assessee was not a dealer in paper and it is an isolated transaction and so it cannot be considered as a sale in the course of his business. The Tribunal held against the dealer on the first two grounds and only with regard to the third ground it accepted the case of the respondent. Consequently, the question that arises for consideration in this tax revision petition is whether the conclusion of the Tribunal on the third point urged on behalf of the respondent is correct or not. This in turn will depend upon the definition of the term'dealer'and'business'under the tamil Nadu Act. Sec. 2 (d) defines the expression'business'as follows :- "2 (d)'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 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. " The term'dealer'is defined in S. 2 (g) as follows : " 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 :- (i) a local authority company or HUF, which carries on such business : (ii) a casual trader; (iii) a commission agent, a broker or a del credere agent, or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal; (iv) every local branch of a firm or company situated outside the State. Explanation.- (1) A society (including a co-operative society), club or firm or an association, which whether or not in the course of business, buys, sells; supplies or distributes goods from or to its members for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this act; Expln. (2) : The Central Government or any state whether or not in the course of business, buy, sell, supply or distribute goods, directly or otherwise, for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act. " * It may be seen that this definition of the term 'business'introduced into the Act by an amendment of 1964 is very wide. The first part of the definition of the term'business'refers to any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.