Ancillary business sale of plant and spare parts was taxable where the manufacturing business continued.

The enlarged statutory definition of "business" under the M.P. General Sales Tax Act covered transactions connected with, incidental to, or ancillary to a continuing manufacturing business. A manufacturer that had not closed its business sold an old plant and its spare parts and accessories acquired for that business, and the sale was treated as sufficiently connected with the ongoing manufacture and sale of strawboards. The sale transactions were therefore exigible to sales tax, and the reference was answered against the assessee.

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Issues: Whether the sale of an old plant and its spare parts and accessories by an assessee continuing the same manufacturing business was a transaction in the course of business and therefore liable to sales tax under the enlarged definition of business.

Analysis: The reference was governed by section 2(bb) of the M.P. General Sales Tax Act, 1958, as amended in 1965, under which business includes not only trade, commerce or manufacture carried on with or without profit motive, but also any transaction in connection with, incidental to, or ancillary to such business. The assessee had acquired the plant, spares and accessories for its manufacturing business and had not closed that business. The sale of the old plant and its accessories, though not itself the assessee's main line of trade, was connected with and ancillary to the continuing business of manufacture and sale of strawboards.

Conclusion: The sale transactions were exigible to tax and the questions referred were answered in the negative and against the assessee.

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