G R KULKARNI Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THIS is a case stated by the Sales Tax Appellate Tribunal (Board of Revenue) referring to us the following question of law :

(2.) THE facts stated are that the assessee who is a contractor supplied to the Engineering Department of the Railways under a contract bricks, chips, rubble, flooring material, balast etc. The assessee did not submit any return and a notice in Form No. XVI was issued to him. After enquiry, his taxable turnover was determined at Rs. 81,000 and a tax of Rs. 4,000 was assessed. A penalty of Rs. 440 was also imposed for the default in submission of returns. During the assessment proceedings the assessee raised the contention that he should not be assessed at the normal rate of five per cent, but at the concessional rate of two per cent, under the Notification No. 878-613/v/st dated 31st March, 1963. This notification reads as follows : In exercise of the powers conferred by Section 12 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959), the State Government hereby exempts in part the class of goods mentioned in column (1) of the Schedule below from the payment of tax so as to reduce it to the rate of tax mentioned in column (2) thereof for the period specified in column (3) and subject to the restrictions and conditions specified in column (4) of the said Schedule :

(3.) THE argument of the learned counsel for the assessee is that Railways are not engaged in a commercial activity and do not carry on business and at any rate the Engineering Department of the Railways is not one engaged in a commercial activity and does not carry on any business and, therefore, the sales made to the Engineering Department did not fall within the exception contained in the notification.