COMMISSIONER OF SALES TAX MAHARASHTRA STATE BOMBAY Vs. INDIAN EXPRESS NEWSPAPERS BOMBAY PRIVATE LIMITED

JUDGEMENT

(1.) This is a reference, on a case stated, by the Maharashtra Sales Tax Tribunal under section 61(1) of the Bombay Sales Tax Act, 1959 (referred to hereinafter as the "said Act"), at the instance of the Commissioner. The question referred to us for our determination is as follows :

(2.) The facts giving rise to the reference are as follows : The respondent-assessee is a company incorporated under the Indian Companies Act and is engaged in the business of printing newspapers for sale. It is a registered dealer under the said Act. The period under assessment is from 1st May, 1970, to 30th April, 1971. During this period the assessee, inter alia, sold the following items :

(3.) As far as old newspapers were concerned, the undisputed position before the Tribunal was that these were newspapers which had been printed but remained unsold and therefore, had to be disposed of as waste paper. The Tribunal came to the conclusion that these could not be regarded as a by-product or subsidiary product which was obtained by the assessee during the manufacturing process and the sale of the same could not be held to be a part of the assessee's business. The Tribunal held that the sales of these old newspapers were not in the course of the assessee's business and were not liable to the levy of sales tax. As far as newspaper cuttings are concerned, it was held by the Tribunal that these cuttings were obtained regularly and continuously by the assessee in the printing of newspapers and were sold from time to time. The Tribunal came to the conclusion that the obtaining of such newspaper cuttings could be regarded as allied or incidental to the business activity and hence an intention to carry on business in the sale of such newspaper cuttings could be reasonably attributed to the assessee. The sales of these cuttings were, therefore, liable to the levy of sales tax. We may make it clear that no controversy is raised before us by the assessee regarding these cuttings and hence we are not concerned with the decision of the Tribunal regarding newsprint cuttings. As far as waste newsprint is concerned, the Tribunal held that this waste newsprint was obtained by the assessee by the reason of damage caused in transit or due to newsprint getting torn or spoilt in the process of printing and jelly, kachara, core-ends and reel-ends. The Tribunal took the view that it could not be said that the assessee had any intention to do business in such waste papers, etc., when it had purchased the newsprint. Hence the sales of waste newsprint were not liable to tax. The question referred to us pertains to the controversy regarding the taxability of the sales of old newspapers and damaged newsprint.