Statutory sales under a government scheme may not amount to business for dealer status under sales tax law.

A statutory authority that disposes of goods only as an incident of a governmental distribution scheme or statutory control function does not carry on the business of selling goods for sales tax purposes. The Calcutta High Court held that the Iron and Steel Controller's sales of imported iron and steel, surplus war materials, and printed forms were part of an organised public programme and not an independent commercial occupation or avocation. The amended definition of "business" was considered, but the essential character of the activity remained non-commercial. The Controller therefore was not a dealer within section 2(c) of the Bengal Finance (Sales Tax) Act, 1941.

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Issues: Whether the Iron and Steel Controller, while disposing of goods under the Technical Co-operation Aid Programme, surplus war materials, and forms and leaflets, was carrying on the business of selling goods so as to be a dealer within the meaning of section 2(c) of the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The relevant inquiry was whether the sales constituted an organised commercial activity amounting to trade or commerce, or whether they were merely incidental disposals made in discharge of a governmental scheme and statutory duty. The Controller acted as the implementing machinery for a public project intended to distribute imported iron and steel through designated channels for agricultural development. The sales of surplus materials and printed forms were likewise made to carry out the statutory control and distribution scheme. The Court also considered the effect of the amended definition of "business" in section 2(1a), including its retrospective operation, but held that even on that footing the essential character of the Controller's activity was not that of carrying on a business as an occupation or avocation.

Conclusion: The Controller was not a dealer and the disputed sales did not fall within the mischief of section 2(c), whether under the unamended or amended definition.

Ratio Decidendi: A statutory authority performing sales only as an incident of a governmental scheme or statutory function, and not as an independent commercial occupation, does not carry on the business of selling goods within the sales tax definition of dealer.

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