Taxability of ancillary sales: fertiliser supplies and press-mud sales were connected with business and treated as taxable transactions.

After the statutory expansion of the concept of business, sales are taxable where the goods sold are connected with the dealer's business, even if the dealer does not ordinarily trade in that commodity. The supply of fertilisers by the mills to cane-growers was treated as a sale because property passed for a price and the transactions were recorded as sales; the bye-laws did not create an agency relationship, so tax was payable. The sale of press-mud, a by-product generated in manufacture and later sold, was also taxable because a separate trading activity in that commodity was unnecessary.

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Issues: (i) Whether the supply of fertilisers by the mills to cane-growers constituted sales liable to tax. (ii) Whether the sale of press-mud, a by-product arising in the course of manufacture of sugar, was taxable even though the mills did not deal in that commodity.

Issue (i): Whether the supply of fertilisers by the mills to cane-growers constituted sales liable to tax.

Analysis: The supplies involved transfer of property in goods for a price and were recorded in the mills' accounts as sales. The bye-laws did not make the mills an agent of the members for purchasing fertilisers; they merely enabled cash advances, and the kind component could not alter the true character of the transaction. The sales were also connected with the mills' business after the statutory amendment expanding the concept of business.

Conclusion: The supply of fertilisers was a sale and was liable to tax, in favour of Revenue.

Issue (ii): Whether the sale of press-mud, a by-product arising in the course of manufacture of sugar, was taxable even though the mills did not deal in that commodity.

Analysis: Press-mud arose as a by-product in the course of the mills' manufacturing activity. Once sold, it was connected with the business of the assessee, and it was unnecessary that the mills should carry on a separate business in that commodity for the sale to be exigible to tax.

Conclusion: The sale of press-mud was taxable, in favour of Revenue.

Final Conclusion: The assessments were upheld because both the fertiliser supplies and the sale of press-mud were treated as taxable transactions connected with the business of the mills.

Ratio Decidendi: After the statutory expansion of the concept of business, a sale is taxable if the goods sold are connected with the dealer's business, even if the dealer does not ordinarily trade in that particular commodity.

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