Business of selling goods turns on organised, regular, profit-making sales, even when disposing of surplus government material.

Disposal of surplus American war material was treated as a commercial activity amounting to business where the sales were regular, widespread, supported by advertising and auctions, and conducted through an organised disposal machinery. The court held that the source of the goods as surplus government material did not prevent the activity from bearing a profit-making character, and the totality of the sales pattern showed continuity, magnitude and diversity consistent with trading. On that basis, the Directorate was carrying on the business of selling goods and the Director fell within the definition of a dealer under the Bengal Finance (Sales Tax) Act, 1941.

---

---

Issues: Whether the disposal of surplus American war material by the Directorate amounted to carrying on the business of selling goods in West Bengal so as to make the Director a "dealer" within the meaning of the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The expression "business" in a taxing statute was treated as connoting a commercial activity ordinarily pursued with a profit motive. The character of the activity had to be determined from its totality, including the magnitude and frequency of sales, their continuity over a period of years, the diversity of goods sold, and the existence of an organised machinery for disposal. The fact that the goods came to the Government as surplus war material did not prevent the sales from being an organised commercial venture. The sales were not casual or isolated, but regular and widespread, supported by advertising and auctions, and were held to evince a profit-making character.

Conclusion: The Directorate was carrying on a business of selling goods and the Director was a dealer within section 2(c) of the Bengal Finance (Sales Tax) Act, 1941. The answer to the reference was therefore in the affirmative and against the assessee.

---