MEHTA CONSTRUCTION COMPANY Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The question which falls for determination in this petition under articles 226 and 227 of the Constitution of India is : "Whether the Maharashtra Sales Tax Tribunal (hereinafter for the sake of brevity referred to as "the Tribunal") constituted under section 21 of the Bombay Sales Tax Act, 1959 (hereinafter for the sake of brevity referred to as "the said Act"), has any power to condone the delay in filing an application for reference under section 61(1) of the said Act ?"

(2.) The petitioners are a partnership firm and carry on business as engineers and building contractors. The petitioners applied for and obtained registration as a dealer under the said Act. During the period 1st June, 1965, to 31st May, 1966, the petitioners in the course of their business as building contractors purchased inter alia building materials such as sand, lime, cement, metal, iron and steel. By his assessment order dated 11th March, 1967, the Sales Tax Officer held that during the said period the petitioners had purchased lime, sand and metal from unregistered dealers and those purchases were, therefore, liable to purchase tax under section 13 of the said Act. Against this order of assessment the petitioners unsuccessfully filed appeals, first to the Assistant Commissioner of Sales Tax and then to the Tribunal. The petitioners' second appeal to the Tribunal was dismissed on 24th November, 1972, and they applied for and obtained a certified copy of the judgment of the Tribunal on 19th December, 1972. Thereafter on 22nd February, 1973, the petitioners filed a writ petition, namely, Miscellaneous Petition No. 281 of 1973, on the original side of this High Court. During the pendency of the said Writ Petition on 27th March, 1973, the petitioners also filed an application for reference under section 61(1) of the said Act before the Tribunal. On 9th April, 1973, the said writ petition was admitted, and on 13th September, 1978, it was dismissed by a learned single Judge of this High Court (Madon, J.) holding that not only had the petitioners an alternative remedy under the said Act but they were pursuing it. On 30th March, 1979, the Tribunal dismissed the petitioner's application for reference on the ground that it was filed seven days after the expiry of the period of limitation for filing such applications, namely, ninety days from the date of the communication of the order of the Tribunal against which the reference was sought. The Tribunal further held that it had no power to condone the delay in filing the said application. It is against this judgment and order of the Tribunal that the present writ petition is directed.

(3.) Before we deal with the question which actually falls for our consideration in this petition we may mention that the main contention of the petitioners is that as they are consuming goods which they purchase in the construction of buildings, they cannot be held to be a dealer and cannot be made liable to purchase tax under the said Act. This controversy now no more survives in view of the judgment of a Division Bench of this Court (Madon and Kania, JJ.) in Commissioner of Sales Tax v. D. V. Save ([1975] 36 S.T.C. 47.), in which it has been held that where a person purchases building materials in the course of his business as a building contractor and consumes such materials in the construction of buildings or in carrying out repairs to buildings, he would be a dealer within the meaning of that term as defined in clause (11) of section 2 of the said Act. It was pointed out in that decision that it is open to a State Government, in the exercise of the legislative powers conferred upon it by the relevant entry in the Legislative List in the Constitution, to levy tax in respect of a transaction of sale on the seller or the purchaser and that provided the goods are purchased in the course of the business of purchasing goods, the purchase tax under the said Act would be attracted subject to the other statutory conditions being fulfilled. It was observed in that case that a person carries on a business with a profit-motive and in order to earn money, but when he purchases goods, by the very act of purchase he is not earning, but he is spending money and, therefore, the business of purchasing goods must necessarily be linked with some activity which would result in profit. It was further held that it is not necessary that the activity with which the purchase of goods is linked must itself be the activity of selling goods and that so long as the goods purchased are either resold with a profit-motive or consumed in the very business activity, for the carrying on of which they were purchased, the purchaser must be held to be carrying on the business of purchasing goods. It was further held that the goods purchased must be such as are indispensable for carrying on the particular business activity of the purchaser and must be goods without which such business activity would not exist and that the business activity of construction of buildings cannot exist without building materials.