Broad definition of business covers disposal of used machinery and spare parts when linked to a manufacturing concern's operations.

Sales of used machinery, iron and steel defectives, and spare parts by a manufacturing concern were treated as business transactions because they were connected with and ancillary to its commercial activity. The Rajasthan Sales Tax Act, 1954 defined "business" broadly, and prior construction of section 2(cc) extended the term to sales of unserviceable materials and scrap where the disposal formed part of the assessee's business operations. Applying that principle, the court held that sales made while modernising the plant fell within the statutory definition of business and were therefore taxable business transactions.

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Issues: Whether the sale of machinery, iron or steel defectives and spare parts by the assessee could be regarded as "business" within the meaning of section 2(cc) of the Rajasthan Sales Tax Act, 1954.

Analysis: The definition of "business" under section 2(cc) had already been construed to include sales of unserviceable materials and scrap where such sales were connected with or ancillary to the assessee's commercial activity. The same principle was applied to a manufacturing concern that sold used machinery, iron and steel defectives, and spare parts while modernising its plant. Those sales were held to arise in the course of the assessee's business and thus to fall within the statutory definition.

Conclusion: The question was answered in the affirmative. The sales were business transactions within section 2(cc), in favour of the Revenue and against the assessee.

Ratio Decidendi: Sales of unserviceable or surplus assets are business transactions where they are connected with or ancillary to the assessee's commercial activity and therefore fall within a broad statutory definition of "business".

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