Government as Dealer under Sales Tax Law: systematic buying and selling can attract liability despite absence of profit motive.

A government undertaking systematic purchase and sale of goods under a distribution scheme can fall within the sales tax definition of "dealer" where the statute expressly includes Government carrying on business. The absence of profit motive did not negate liability under the Andhra Pradesh General Sales Tax Act because profit motive was immaterial under its definition of business, and the activity of buying and selling foodgrains and fertilisers amounted to trade or business. Under the Central Sales Tax Act, profit motive remained relevant, but it did not displace the broader finding sustaining tax liability on the state law basis.

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Issues: (i) whether the Central Government, acting through its officer, fell within the definition of "dealer" and could be assessed to tax under the Central Sales Tax Act, 1956; (ii) whether absence of profit motive negatived liability under the Central Sales Tax Act, 1956 and the Andhra Pradesh General Sales Tax Act, 1957.

Issue (i): whether the Central Government, acting through its officer, fell within the definition of "dealer" and could be assessed to tax under the Central Sales Tax Act, 1956.

Analysis: The definition of "dealer" in section 2(b) of the Central Sales Tax Act, 1956 expressly includes a Government carrying on business. The scheme of section 9(3) of the same Act shows that the tax is levied by the Government of India but is assigned to the State concerned, and article 269(g) of the Constitution of India proceeds on the same footing. The Central Government was therefore not outside the charging framework merely because it was the taxing authority.

Conclusion: The Central Government was liable to be treated as a dealer for the purposes of the Central Sales Tax Act, 1956.

Issue (ii): whether absence of profit motive negatived liability under the Central Sales Tax Act, 1956 and the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: Systematic purchase and sale of foodgrains and fertilisers in implementation of a governmental distribution scheme amounted to trade or business. Under section 2(1)(bbb) of the Andhra Pradesh General Sales Tax Act, 1957, profit motive was immaterial. Under the Central Sales Tax Act, 1956, profit motive remained relevant, but that question required factual enquiry and did not defeat the liability already sustained on the broader footing for the State Act.

Conclusion: The activity constituted business for the State Act, while the profit-motive question under the Central Act did not alter the dismissal of the appeals.

Final Conclusion: The challenged assessments were sustained and the appeals failed in entirety.

Ratio Decidendi: A government carrying on systematic buying and selling of goods may be a dealer under sales tax law, and where the statute expressly includes government within the definition of dealer, liability cannot be avoided merely because the taxing authority is itself the assessee.

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