Auction sales of confiscated goods were not business activity, so Customs was not a dealer under sales tax law.

Auction sales of confiscated goods by the Customs Department were not a business activity within the Madras General Sales Tax Act, 1959, because the department only realised seized goods incidentally and did not carry on an organised trade, commerce or manufacture. Mere periodic sales and the absence of profit motive were insufficient to make the department a dealer. The auction sales were therefore not first sales by a dealer, and the assessee was correctly treated as the first dealer in camphor.

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Issues: Whether auction sales by the Customs Department of confiscated goods amounted to business activity so as to make the Customs Authority a dealer under the Madras General Sales Tax Act, 1959, and render the assessee liable as the first dealer in camphor.

Analysis: The definition of dealer depended on whether the activity fell within the statutory concept of business, namely trade, commerce or manufacture, or an adventure or concern in the nature of trade, commerce or manufacture. The Customs Department merely came into possession of confiscated goods from time to time and sold them by auction when required. Such sales were held to be incidental realisations of confiscated goods and not an organised commercial activity of trade or commerce. Mere periodicity of sales and absence of profit motive did not convert the department into a person carrying on business for the purposes of the Act.

Conclusion: The Customs Department was not a dealer and its auction sales were not first sales by a dealer; the assessee was correctly assessed as the first dealer. The revision was rightly dismissed.

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