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Issues: (i) whether the sale of glazed newsprint procured for a discontinued publication was a transaction incidental or ancillary to the respondent's business and liable to sales tax; (ii) whether the turnover from print waste and cut waste was likewise includible in the assessable turnover.
Issue (i): Whether the sale of glazed newsprint procured for a discontinued publication was a transaction incidental or ancillary to the respondent's business and liable to sales tax.
Analysis: The term "business" in section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, as amended, includes not only the main trade or manufacture but also transactions incidental or ancillary to it. Newsprint purchased for use in publication, though later sold when the publication ceased, remained connected with the respondent's business of printing, publishing and selling newspapers. Such disposal was therefore not a detached or independent transaction.
Conclusion: The turnover from the sale of glazed newsprint was liable to tax, in favour of Revenue.
Issue (ii): Whether the turnover from print waste and cut waste was includible in the assessable turnover.
Analysis: Print waste and cut waste were treated as unused or unserviceable paper arising out of the same newspaper business. On the same expanded meaning of "business" and on the earlier decision applied by the Court, their sale was incidental or ancillary to the respondent's main business and could not be excluded from assessment.
Conclusion: The turnover from print waste and cut waste was liable to tax, in favour of Revenue.
Final Conclusion: The revision succeeded and the assessment was restored to the extent of the disputed turnovers, with no order as to costs.
Ratio Decidendi: Under the statutory definition of "business", sales of goods acquired for and arising out of the course of the assessee's main business are taxable when they are incidental or ancillary to that business, even if the goods are later disposed of after becoming unused or unserviceable.
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