UNION OF INDIA Vs. STATE

JUDGEMENT

(1.) THIS revision petition is directed against the order of the Deputy Commissioner, Sales-Tax (Appeals), Jodhpur, dated the 30th March, 1963, whereby the appeal of the petitioner against the assessment order of the Sales Tax Officer, dated 6. 2. 62 for the accounting period 1. 4. 57 to 31. 3. 58 was partially accepted and the case was remanded to the learned Assessing Authority for revising the assessment of tax at the prescribed rates holding that the applicant was liable to pay sales tax as a dealer. I have heard the counsel for the petitioner as well as the Government Advocate and have examined the record.

(2.) THE learned counsel for the petitioner attacked the impugned order on two grounds. His first argument was that as the transaction related to the period prior to 1960 the Central Government was not liable to taxation under the Rajasthan Sales Tax Act as it was not included in the definition of the word 'dealer' as defined in sec. 2 (f) of the Rajasthan Sales Tax Act as it then stood. He also drew my attention to the Division Bench ruling of the Board of Revenue dated 30. 4. 63 revision No. 32/bikaner/st/1962 - State of Rajasthan vs. Assistant Commercial Superintendent, Lost Property, Northern Railway, Bikaner, in which this aspect of the question has been discussed at some length. By just supposing the earlier and the latter versions of sec. 2 (f) of the Sales Tax Act the learned Members drew the inference that at the time relevant for the above cited case expression 'dealer' did not include the Central Government and be the Railways were a department of the Central Government, and relying on AIR 1954 Mad. 1130, AIR 1957 Assam, 179 and AIR 1958 Andhra Pradesh 332 it was held by the Hon'ble Members that disposal of lost property by the Railway administration was not a business of buying or selling or supplying goods, as the expression business must be interpreted in a 'restricted and commercial' sense i. e. an activity with a view to earning profit. THE words 'carrying on business' co-noted a continuous trade or occupation involving time and labour as also some investments, which might be regarded as an independent trade or occupation by itself capable of being sold or transferred as such. THE principle underlying the distinction was that the transactions must be of a commercial nature and that business was a trade or profession at which one worked regularly for profit. On the strength of this ruling, and the authorities cited therein, the learned counsel for the petitioner argued that the learned Sales-Tax Officer had erred in holding that the disposal of unserviceable and scrap materials fell within the definition of business. It was urged by him that the Railways were bound to dispose of unserviceable and scrap materials anyhow in order to reduce their cost, as condemned articles, such as packing cases, drums, gunny bags waste papers, ropes of sorts were of no use to the Railways and it would not be right to categorise their disposal as falling within the normal business of the Railways which was to transport passengers and goods. It was during the business of transporting passengers and goods that the Railways earnt their profits. THEre was no reasonable connection between the normal business of the Railways and the sale of scrap and unserviceable materials which could not by any stretch of imagination be categorised as a by-product of transactions involved in the running of the railways or an industry subsidiary thereto.