Incidental or ancillary business transactions include sale of surplus machinery acquired for manufacturing use and may be taxable.

The wide statutory meaning of "business" under the Kerala General Sales Tax Act included transactions incidental or ancillary to manufacturing activity. Machinery acquired for use in a rubber-goods factory remained connected with that business even when it was later found surplus and sold at cost price. That sale was therefore not outside the tax net merely because the machinery was not regular stock-in-trade. On that reasoning, the turnover from the sale of surplus machinery was taxable as part of the assessee's business.

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Issues: Whether the sale of surplus machinery purchased for use in the assessee's factory formed part of the assessee's business and was exigible to sales tax under the Kerala General Sales Tax Act, 1963.

Analysis: The definition of "business" under section 2(vi) is wide enough to include not only trade, commerce and manufacture, but also any transaction in connection with, or incidental or ancillary to, such activities. The assessee was a registered dealer engaged in manufacture of rubber goods, and the machinery had been acquired for use in that manufacturing activity. Though the machinery was ultimately sold at cost price as surplus and unutilised, the sale was a transaction linked to the assessee's manufacturing concern and therefore fell within the enlarged statutory meaning of business. The statutory definitions of "casual trader" and "dealer" also supported the view that occasional transactions connected with goods are not outside the tax net merely because the article sold is not part of the assessee's regular stock-in-trade.

Conclusion: The sale of surplus machinery was incidental or ancillary to the assessee's business and was taxable; the deletion of the turnover by the Tribunal was wrong.

Ratio Decidendi: A sale of machinery acquired for and connected with a manufacturing business, even if later found surplus and sold at cost price, is a transaction incidental or ancillary to that business and forms part of taxable turnover.

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