Extended business turnover and distinct commodity taxation permit levy on incidental sales and earlier-stage purchase turnover.

Ancillary sales of used packing materials and other unserviceable articles were treated as part of taxable turnover under the extended definition of business because such sales were incidental to the dealer's business and need not form its main activity. The purchase turnover of locally bought raw hides and skins was also held taxable under the State sales tax law, even though the manufactured tanned hides and skins were later sold in inter-State trade and taxed under Central sales tax, because raw hides and skins and tanned hides and skins were treated as distinct commodities. Both items were therefore brought to tax.

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Issues: (i) Whether the sale of used packing materials and other unserviceable articles formed part of the assessee's taxable turnover under the extended definition of business; (ii) Whether the proportionate purchase value of locally purchased raw hides and skins could be brought to tax under the Tamil Nadu General Sales Tax Act when the tanned hides and skins manufactured therefrom were sold in inter-State trade and taxed under the Central Sales Tax Act.

Issue (i): Whether the sale of used packing materials and other unserviceable articles formed part of the assessee's taxable turnover under the extended definition of business.

Analysis: The extended definition of business in section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, as amended, covers ancillary activities carried on by a dealer. Sales of packing materials and unserviceable articles need not constitute the dealer's main line of business to be included in taxable turnover when they are incidental to the business carried on.

Conclusion: The turnover from sale of empties and other unserviceable items was rightly treated as part of the assessee's taxable turnover.

Issue (ii): Whether the proportionate purchase value of locally purchased raw hides and skins could be brought to tax under the Tamil Nadu General Sales Tax Act when the tanned hides and skins manufactured therefrom were sold in inter-State trade and taxed under the Central Sales Tax Act.

Analysis: The goods in question were declared goods under section 14(iii) of the Central Sales Tax Act, 1956, but raw hides and skins and dressed or tanned hides and skins were treated as separate commodities for the purpose of trade and taxation. The fact that the inter-State sale of tanned hides and skins had suffered Central sales tax did not bar levy on the purchase turnover of the raw hides and skins under the State sales tax law. Earlier contrary authority was treated as no longer good law in view of later Supreme Court decisions.

Conclusion: The proportionate purchase value of raw hides and skins was validly brought to charge under the Tamil Nadu General Sales Tax Act.

Final Conclusion: Both disputed items of turnover were held taxable, and the assessee obtained no relief.

Ratio Decidendi: Ancillary sales connected with a dealer's business form part of taxable turnover under the extended definition of business, and taxation of a later or different commodity stage does not preclude levy on the purchase turnover of an earlier distinct commodity even where the goods are declared goods.

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