Old newspapers sold as waste paper lose sales tax exemption and form taxable business turnover under the sales tax law.

Surplus old newspapers sold by weight as waste paper ceased to retain the character of exempt newspaper sales under the Tamil Nadu General Sales Tax Act, 1959. Once newspapers became old and unsold, their disposal as waste paper was not a sale of newspapers for exemption purposes; the activity was also treated as business connected with the publishing operation and carried on with a profit motive within section 2(d) as then in force. The turnover from such sales was therefore taxable, and the sales tax assessment on the disputed turnover was upheld.

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Issues: Whether the turnover from sale of surplus old newspapers as waste paper was taxable under the Tamil Nadu General Sales Tax Act, 1959, and whether such sales retained the character of exempt newspaper sales.

Analysis: Newspapers are exempt when sold as a medium of current news for reading by the public. Once they become old and unsold, they lose that character, and sale by weight as waste paper is not a sale of newspapers. The disposal of surplus copies was a activity connected with the appellant's publishing business and was undertaken with a profit motive, thereby constituting business within section 2(d) of the Act as it then stood.

Conclusion: The turnover from sale of surplus newspapers as waste paper was taxable, and the assessment was rightly sustained.

Final Conclusion: The appeal was rejected and the sales tax assessment on the disputed turnover was upheld.

Ratio Decidendi: Surplus old newspapers sold as waste paper cease to be newspapers for sales tax exemption purposes, and their regular sale as part of the publishing activity constitutes taxable business turnover.

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