Taxability of workmen foodgrain supplies upheld, while casual sale of scrap materials was held outside business turnover.

Sale of foodgrains supplied to workmen under an employment-related arrangement was treated as a sale within the Orissa Sales Tax Act and included in taxable turnover, so tax liability was upheld on that item. By contrast, occasional disposal of used drums, G.I. sheets, unserviceable hose pipes, rejected machine parts and similar scrap did not amount to carrying on business in those goods; casual realisation from discarded materials was not exigible to sales tax, so liability was rejected on that item. The note also records that the issue relating to cement and steel supplies was not adjudicated and remained outside the final determination.

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Issues: (i) Whether sale of foodgrains supplied by the assessee to its workmen was exigible to tax and formed part of taxable turnover under the Orissa Sales Tax Act. (ii) Whether occasional disposal of used empty drums, used G.I. sheets, unserviceable hose pipes, rejected machine parts and other scrap materials was a sale in the course of business so as to make the assessee liable to tax.

Issue (i): Whether sale of foodgrains supplied by the assessee to its workmen was exigible to tax and formed part of taxable turnover under the Orissa Sales Tax Act.

Analysis: The issue was governed by the same principle already applied in an earlier decision concerning similar sales to workmen. The supply of rice and wheat to workmen, even when made without profit under an employment-related arrangement, constituted sales within the meaning of the Act and was liable to be included in turnover.

Conclusion: The sale of foodgrains to the workmen was liable to tax and the finding was against the assessee.

Issue (ii): Whether occasional disposal of used empty drums, used G.I. sheets, unserviceable hose pipes, rejected machine parts and other scrap materials was a sale in the course of business so as to make the assessee liable to tax.

Analysis: Casual realization of price from discarded or unserviceable goods does not by itself establish a business of selling those goods. Applying the settled principle that isolated disposal of surplus or scrap articles does not amount to carrying on business in those commodities, the assessee could not be treated as a dealer qua these items.

Conclusion: The disposal of the scrap and discarded materials was not in the course of business and was not exigible to sales tax, in favour of the assessee.

Final Conclusion: Tax liability was upheld in respect of the foodgrains supplied to workmen, but rejected in respect of the casual disposal of scrap and discarded materials; the issue relating to cement and steel supplies was not adjudicated and remained outside the final determination.

Ratio Decidendi: Casual sale of discarded or unserviceable goods does not amount to carrying on business in those goods unless the frequency, continuity and commercial character of the transactions show an intention to trade in them.

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