COMMISSIONER OF SALES TAX Vs. D V SAVE

JUDGEMENT

(1.) This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959, made at the instance of the Commissioner of Sales Tax. The statement of the case shows that the respondents carry on the business of constructing and repairing buildings. They mainly get contracts for such works from the Government and semi-Governmental bodies. For the purpose of carrying on their business of building contractors the respondents purchase building materials which they utilise either in the construction or in the repairs to buildings, as the case may be. Section 52(1) of the Bombay Sales Tax Act, 1959, confers power upon the Commissioner of Sales Tax to determine certain questions which arise otherwise than in proceedings before a court or before the assessment or reassessment of a dealer has commenced. Amongst the questions which the Commissioner is so authorised to determine are the questions whether any person or any firm is a dealer, whether any particular dealer is required to be registered and whether any tax is payable in respect of any particular sale or purchase or if tax is payable, the rate thereof. Accordingly, the respondents made an application dated 30th December, 1964, to the Commissioner of Sales Tax to determine the three questions, namely : (1) whether the respondents were dealers within the meaning of the said term as defined in clause (11) of section 2 of the said Act, (2) whether they were liable to be registered as dealers under the said Act, and (3) whether they were liable to pay purchase tax on the goods and materials purchased by them from unregistered dealers. The Deputy Commissioner of Sales Tax, Eastern Division, Nagpur, who heard this application by his order dated 21st February, 1966, answered all the said three questions in the affirmative. Against the said decision the respondents went in appeal to the Sales Tax Tribunal and by its judgment delivered on 25th October, 1967, the Sales Tax Tribunal held that the business of the respondents was not of purchasing goods nor of selling goods and that the purchases made by the respondents were purchases made during the course of their business as building contractors, but they were not purchases made in the course of their business as contemplated by the definition of "dealer" in clause (11) of section 2 of the said Act and, therefore, they could not be held to be dealers. The Tribunal accordingly allowed the respondents' appeal.

(2.) At the instance of the Commissioner of Sales Tax, the Tribunal has stated a case and referred it to the High Court. The question which is submitted to the High Court by the Tribunal for its decision is as follows :

(3.) Clause (11) of section 2 of the said Act defines a "dealer" as follows :