TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the purchase of building materials and scaffolding materials by a building contractor for construction or repairs was made in the course of business; (ii) Whether the respondents were dealers within the meaning of the Bombay Sales Tax Act, 1953.
Issue (i): Whether the purchase of building materials and scaffolding materials by a building contractor for construction or repairs was made in the course of business.
Analysis: Purchases of building materials used in the course of construction or repairs by a building contractor are part of the business activity and therefore fall within purchases made in the course of business. Scaffolding materials stand on a different footing: such goods are not automatically treated as business purchases and the character of the goods must be examined to see whether they are merely adjuncts to the business or form part of the capital assets of the contractor.
Conclusion: The purchases of building materials were purchases made in the course of business. The purchases of scaffolding materials could not be so treated if they were adjuncts to the business or formed part of the capital assets.
Issue (ii): Whether the respondents were dealers within the meaning of the Bombay Sales Tax Act, 1953.
Analysis: The definition of dealer under the earlier Act was treated as materially the same as the definition considered in the later sales tax regime for similarly situated building contractors purchasing and consuming materials in the course of their construction activity. On that basis, the respondents fell within the statutory conception of dealer.
Conclusion: The respondents were dealers within the meaning of section 2(6) of the Bombay Sales Tax Act, 1953.
Final Conclusion: The reference was answered substantially in favour of the revenue on the dealer issue, while the question of scaffolding materials was left to be determined according to whether those goods were capital assets or merely adjuncts to the business.
Ratio Decidendi: A contractor's purchase of materials used in construction or repairs is a purchase in the course of business, but goods used only as adjuncts to the business or forming part of capital assets are not necessarily so treated.
TaxTMI 
TaxTMI 
