COMMERCIAL TAXES OFFICER SURVEY AND INVESTIGATION JODHPUR Vs. DIVISIONAL SUPERINTENDENT NORRN RAILWAY JODHPUR

JUDGEMENT

(1.) THE short question, which arises for consideration in this reference under section 15 (2) of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as the Act), is whether the Northern Railway is liable to pay sales tax on the sale of coal-ash made by it. THE question of law referred to us reads as under : " Whether, in the facts and circumstances of the case, the Divisional Superintendent, Northern Railway, Jodhpur, was a 'dealer' within the meaning of section 2 (f) of the Rajasthan Sales Tax Act, 1954, for the assessment year 1956-57 and was consequently liable to pay sales tax under that Act ?"

(2.) FOR the period from 1st April, 1956, to 31st March, 1957, the Divisional Superintendent, Northern Railway, Jodhpur, was assessed to sales tax on the sale of coal-ash made by him. The Sales Tax Officer held that the Divisional Superintendent, Northern Railway, Jodhpur, came within the definition of "dealer" as defined in the Act. The assessee filed appeal to the Deputy Commissioner (Appeals), Sales Tax, Jodhpur, but was unsuccessful. He preferred a revision before the Board of Revenue for Rajasthan, which allowed the same and set aside the order of the Deputy Commissioner (Appeals) holding that the assessee was not liable to pay sales tax on the sale of coal-ash. The Commercial Taxes Officer then applied to the Board for starting the case and referring the question of law arising out of its order for the opinion of this Court. The Board, however, rejected the application. Thereupon, the Commercial Taxes Officer made an application to this Court under section 15 (2) of the Act, which was allowed on 11th March, 1968. It is in pursuance of the order of this Court dated 11th March, 1968, that this reference has been made.

(3.) THE activity of the railway in selling coal-ash must be held to be a business within the definition of the term "business" as the term has been so defined as to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce, adventure or concern carried on with a motive to make gain or profit and whether or not any such profit accrues from such trade, commerce, manufacture, adventure or concern. In District Controller of Stores, Northern Railway, Jodhpur v. Assistant Commercial Taxation Officer [[1976] 37 S. T. C. 423 (S. C.); A. I. R. 1976 S. C. 489], the Supreme Court observed that the fact that though the activity involved in selling unserviceable material and scrap-iron, etc. , would not amount to carrying on business in the normal connotation of that term, yet it would be business as defined in the Act. THEir Lordships further observed that the railway, since it is concerned in the activity of transportation, is engaged in commerce within the meaning of clause (i) of the definition and the sale of unserviceable materials and scrap-iron, etc. , by it is a transaction in connection with or ancillary to such commerce within clause (ii) of that definition.