Mere sale of surplus agricultural produce is not a taxable business unless the seller is engaged in the business of sale.

Mere cultivation of an assessee's own land and sale of surplus agricultural produce do not, by themselves, amount to carrying on the business of selling or supplying goods for sales tax purposes. Liability attaches only where the person is engaged in that business, and the taxing authority must prove that essential ingredient. On the facts, separate agricultural and business accounts were maintained and there was no evidence that the land was acquired or cultivated with a primary intention to conduct a selling business. The assessee was therefore not a dealer in respect of the agricultural produce, and the related sale proceeds could not be included in taxable turnover.

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Issues: Whether the sale of agricultural produce grown on the assessee's own lands, in the facts of the case, constituted carrying on the business of selling or supplying goods so as to make him a dealer liable to sales tax.

Analysis: Liability under the Act attached only to a dealer whose sales formed part of the business of selling or supplying goods. The definitions of "dealer", "sale", and "goods" showed that mere sale of movable goods was not enough; the decisive element was that the person must be engaged in the business of selling or supplying those goods. Cultivation of land and sale of surplus produce may generate income, but they do not by themselves amount to a business of sale or supply of agricultural produce. On the facts, the assessee maintained separate agricultural and business accounts, and there was nothing to show that the lands were acquired or cultivated with the primary intention of carrying on such a business. The taxing authority was required to establish that essential ingredient and failed to do so.

Conclusion: The assessee was not a dealer in respect of the agricultural produce and the sale proceeds from the Belgaon Kheti account and the cotton and grain account from Kheti could not be included in his taxable turnover.

Ratio Decidendi: Mere cultivation of one's own land and sale of the surplus produce do not amount to carrying on the business of selling or supplying goods unless the facts show a primary intention to engage in that business; the burden lies on the taxing authority to prove that element before sales tax can be imposed.

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