Business sales of by-products and residual materials can be included in taxable turnover when they are regular and profit-making.

Regular and continuous sales of coal ash, cinders and empty drums by a manufacturer were treated as business sales because their volume, frequency and repeated sale to different purchasers showed a profit-making commercial activity rather than mere disposal of waste. The sale proceeds were credited in the coal consumption accounts and increased commercial profits, supporting the finding that the transactions formed part of the assessee's business. Accordingly, the sales were held includible in taxable turnover under the Madhya Pradesh General Sales Tax Act, 1958.

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Issues: Whether regular sales of coal ash, cinders and empty drums by a manufacturer formed part of its business so as to be includible in taxable turnover under the Madhya Pradesh General Sales Tax Act, 1958.

Analysis: The sales were found to be recurring, frequent and made to different purchasers over the relevant assessment periods. Their volume, continuity and regularity supported the inference that the assessee was carrying on business in those commodities and was not merely disposing of waste or unserviceable stock. The sale proceeds were credited in the coal consumption accounts and ultimately increased the commercial profits of the assessee. On that basis, the transactions were held to be sales in the course of business and not isolated disposals outside the taxable turnover.

Conclusion: The sales of coal ash, cinders and empty drums were liable to sales tax and were rightly includible in the assessee's taxable turnover.

Final Conclusion: The reference was answered against the assessee and the taxing authority's view that the disputed sales were assessable was upheld.

Ratio Decidendi: Where a manufacturer regularly and continuously sells by-products or residual materials with a profit-making intention, those sales may constitute business sales and form part of taxable turnover.

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