Dealer status depends on profit-oriented trading activity, not incidental sale of unserviceable assets used in another business.

A transport operator who sold used-up motor vehicles, tyres, batteries and other unserviceable parts was not treated as a dealer in respect of those sales under section 2(c) of the C.P. and Berar Sales Tax Act, 1947. The controlling test was whether the person was carrying on a commercial business of selling the particular goods with a profit motive. Goods acquired for use in the transport business and later sold only when unserviceable were merely incidental realisations, and their frequency did not by itself convert the activity into trading in those goods. The Court therefore held that incidental disposal of obsolete assets did not amount to dealer status for those sales.

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Issues: Whether the assessee, a transport operator who sold used-up motor vehicles and parts, could be regarded as a dealer under section 2(c) of the C.P. and Berar Sales Tax Act, 1947 in respect of those sales.

Analysis: The controlling test was whether the activity constituted the business of selling or supplying the particular goods, understood in a commercial sense and pursued with a view to earn profit. The assessee's business was transport, not dealing in old vehicles or motor accessories. The vehicles, tyres, batteries and other parts had been acquired for use in that business and were sold only when they became unserviceable. Their sale did not indicate an intention to carry on a trading activity in those goods, and the mere frequency or regularity of disposal was insufficient to convert such incidental realisation into a business of selling those goods.

Conclusion: The assessee was not a dealer under section 2(c) of the C.P. and Berar Sales Tax Act, 1947 in respect of the sales of used-up motor vehicles and used-up parts like tyres and tubes.

Final Conclusion: The reference was answered against the Revenue and in favour of the assessee, with costs awarded to the assessee.

Ratio Decidendi: A person is a dealer only in relation to goods which it is his business to sell or supply, and incidental sale of unserviceable goods acquired for use in another business does not amount to carrying on the business of selling those goods unless the sales are motivated by a profit-oriented trading activity.

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