Canteen sales form taxable turnover, while occasional sale of scrap and waste is not business activity.

Sales through a workers' canteen were treated as part of the assessee's commercial activity because the canteen was maintained under the relevant statutory regime, so the sale proceeds formed part of gross and taxable turnover under the Orissa Sales Tax Act. By contrast, occasional disposal of unserviceable materials such as empty drums, scraps and waste did not amount to business activity unless carried on regularly as a commercial venture with trade-like attributes; such transactions were not enough to make the assessee a dealer for those sales. One issue was therefore decided against the assessee and the other in its favour.

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Issues: (i) whether sales in the workers' canteen were includible in the assessee's gross and taxable turnovers under the Orissa Sales Tax Act, 1947; (ii) whether sales of unserviceable materials such as empty drums, scraps and waste materials were includible in the assessee's gross and taxable turnovers.

Issue (i): Whether sales in the workers' canteen were includible in the assessee's gross and taxable turnovers under the Orissa Sales Tax Act, 1947.

Analysis: A binding earlier decision of the Court had already held that maintenance of and sales through a canteen required under the relevant statutory regime formed an integral part of the assessee's commercial activity and that the sale proceeds were part of turnover. In the presence of that binding authority, contrary decisions of other High Courts could not displace the settled position.

Conclusion: The question was answered against the assessee.

Issue (ii): Whether sales of unserviceable materials such as empty drums, scraps and waste materials were includible in the assessee's gross and taxable turnovers.

Analysis: The governing test was whether the disposal of such materials amounted to the assessee's business activity. Applying the later and larger-Bench view, occasional disposal of discarded or unserviceable items, without frequency, repetition, or devotion of time and attention as a commercial venture, did not constitute business and did not make the assessee a dealer in respect of those transactions.

Conclusion: The question was answered in favour of the assessee.

Final Conclusion: The references were answered on merits with one issue decided against the assessee and the other in its favour, and the connected writ challenge became academic and stood dismissed.

Ratio Decidendi: Disposal of discarded or unserviceable materials does not amount to business unless it is carried on as a regular commercial activity with the attributes of trade; canteen sales, where held to form an integral part of the assessee's commercial operation, form part of taxable turnover.

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