Purchase tax applies where Government is treated as a person and repeated onward supply amounts to business activity.

The word "person" in purchase tax provisions can include the Government of India where liability is imposed on the purchaser and not directly on the Government, so purchases made from the Government may attract purchase tax. Repeated tender-based purchases, receipt of goods, payment, and onward supply to another concern on a regular basis were treated as a systematic commercial activity, making the transactions purchases in the course of business. On these principles, the assessee's purchases were held liable to purchase tax, and the stated ratio was that Government may fall within "person" for such provisions and regular onward supply can constitute business activity.

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Issues: (i) Whether the Government of India was a "person" within the meaning of section 10 of the Bombay Sales Tax Act, 1953 so as to attract purchase tax on purchases made from it. (ii) Whether the assessee's repeated purchases and onward supply of sugar were made in the course of business.

Issue (i): Whether the Government of India was a "person" within the meaning of section 10 of the Bombay Sales Tax Act, 1953 so as to attract purchase tax on purchases made from it.

Analysis: The expression "person" is of wide amplitude and ordinarily includes the Government of India, which is a legal person capable of suing and being sued under Article 300 of the Constitution of India. The exclusionary rule that the State is not bound by taxing or penal provisions unless expressly or by necessary implication included applies where liability is being imposed on the Government itself. Section 10, however, fastens liability on the purchaser and uses the word "person" in relation to the seller, not as a charging provision against the Government. The authorities relied on for excluding the State from taxing or penal provisions were therefore distinguishable.

Conclusion: The Government of India was a person within the meaning of section 10, and purchase tax was leviable on the assessee's purchases.

Issue (ii): Whether the assessee's repeated purchases and onward supply of sugar were made in the course of business.

Analysis: The findings showed that the assessee repeatedly submitted tenders, obtained quotas, paid the purchase price, took delivery, and then handed over the sugar to another concern without consideration. The purchases were not for private consumption. On those facts, the assessee's regular activity was to buy sugar and pass it on, which constituted a systematic commercial course of conduct. The fact that the sugar was later handed over to another concern did not alter the character of the purchases as business transactions.

Conclusion: The purchases were made in the course of business and were liable to purchase tax.

Final Conclusion: The reference was answered against the assessee on the two questions decided on merits, and no answer was returned on the third question as it was not pressed.

Ratio Decidendi: For purchase tax provisions, the word "person" may include the Government where liability is not imposed on the Government itself, and repeated purchasing and onward supply of goods on a regular basis constitutes a purchase in the course of business.

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