Business of buying goods includes construction materials consumed in works contracts, attracting purchase tax liability.

A building contractor who purchased materials for use in construction or repair could be treated as a dealer if those purchases were made in the course of the business of buying goods under the Bombay Sales Tax Act, 1959. The Court read the definition of "dealer" and the purchase-tax scheme to require business activity involving buying and disposal with a profit-motive, and held that disposal is not confined to resale of the same goods. Materials indispensable to carrying on construction work, though consumed in execution of the work and used in immovable property, remained purchases in the course of business. The purchases were therefore liable to purchase tax, and the contractor was treated as a dealer in relation to those materials.

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Issues: Whether building materials purchased by a building contractor and consumed in construction or repair work were purchased in the course of the business of buying goods so as to render the contractor a dealer liable to purchase tax under the Bombay Sales Tax Act, 1959.

Analysis: The definition of "dealer" under section 2(11) of the Bombay Sales Tax Act, 1959, turns on whether a person carries on the business of buying or selling goods. The scheme of the Act shows that purchase tax is attracted only when a dealer makes purchases in the course of such business and the statutory conditions under sections 3 and 13 are satisfied. The Court applied the principle that business in this context means an integrated activity of buying and disposal with a profit-motive, and that disposal is not confined to resale of the same goods. Goods purchased for use in the business itself may still be bought in the course of business if they are indispensable to that business and are consumed in its execution. Building materials were held to be essential to the business of building construction and were not mere adjuncts or capital assets. The Court therefore treated the purchases as part of the business of buying goods, and held that the fact that the materials were used in construction of immovable property did not exclude purchase-tax liability.

Conclusion: The respondents were dealers in relation to the building materials purchased, and the purchases were liable to purchase tax.

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