Disposal of surplus scrap by a statutory housing board does not amount to business for sales tax purposes.

A statutory housing board disposing of old forms, papers, dismantled material and empty cement bags was not carrying on business as a dealer under the Andhra Pradesh General Sales Tax Act. The statutory definitions of "dealer" and "business" required evidence of trade, commerce, manufacture, or an activity incidental or ancillary to such activity, and the Board's housing functions under governmental control did not satisfy that test. The sales were merely of obsolete or surplus materials cleared from construction activity, with no intention to trade in those goods. Those disposals were therefore outside the tax net.

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Issues: Whether the Housing Board, on selling old and unused forms, papers, dismantled material and empty cement bags, could be treated as a dealer carrying on business so as to attract tax under the Andhra Pradesh General Sales Tax Act.

Analysis: The statutory definitions of "dealer" and "business" required proof that the assessee was carrying on a business of buying, selling, supplying or distributing goods, or was engaged in trade, commerce, manufacture, or an activity incidental or ancillary thereto. The Housing Board was a statutory corporation created to execute housing schemes under governmental control, and its objects did not show that it was engaged in trade or commerce. The sales in question were of obsolete or unserviceable materials disposed of to clear space or as surplus from construction activity, and there was no basis to infer that those items had been acquired with an intention to carry on business in them. The earlier authorities relied on by the Revenue were distinguished, while the decisions holding that disposal of surplus or scrap material by such statutory bodies does not by itself amount to business were applied.

Conclusion: The Housing Board was not a dealer carrying on business within the meaning of the Act, and the disputed sales were not taxable in its hands.

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