Amended definitions of business and dealer govern taxability of discarded machinery sale proceeds under sales tax law.

Sale proceeds from an old discarded oil engine had to be tested under the amended definitions of "business" and "dealer" in the Kerala General Sales Tax Act, because the relevant assessment year was governed by Act 22 of 1974. The Tribunal erred by applying the pre-amendment law and by treating the discarded machinery as a capital asset outside taxable turnover. The Kerala High Court held that the amended provisions and the relevant precedent had to be applied, set aside the Tribunal's view, and remitted the matter for fresh decision on the correct statutory footing.

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Issues: Whether the sale value of an old discarded oil engine was includible in the assessee's taxable turnover under the amended definitions of "business" and "dealer" in the Kerala General Sales Tax Act.

Analysis: The assessment year was 1974-75 and the amendment brought about by Act 22 of 1974 had come into force. The Tribunal proceeded on the pre-amendment definitions of "business" and "dealer" and treated the discarded machinery as a capital asset outside taxable turnover. The Court held that this approach was erroneous because the amended statutory definitions had to be applied. The matter required reconsideration in the light of the amended provisions and the relevant precedent on when sale of goods or machinery used in connection with the business can be brought to tax.

Conclusion: The issue was decided in favour of the Revenue. The Tribunal's view that the sale proceeds were not includible in taxable turnover was set aside and the matter was remitted for fresh decision.

Final Conclusion: The revision succeeded and the Tribunal was directed to rehear the appeal on the correct statutory footing.

Ratio Decidendi: Where an assessment year is governed by an amended definition of "business" and "dealer", the turnover from sale of discarded machinery used in connection with the business must be examined under the amended provisions and not under the pre-amendment law.

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