Expanded business definition makes auction sale of discarded transport materials liable to sales tax

A widened statutory definition of "business" brought trade, commerce and sale transactions incidental or ancillary to the main activity within sales tax liability, even without a profit motive. On that footing, auction sales of unserviceable, discarded and scrap materials generated in the course of the Corporation's transport operations were treated as sales by a dealer under the State sales tax law. The court held that such disposals fell within the enlarged concept of business and were taxable, answering the question in favour of the Revenue and against the assessee.

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Issues: Whether the Corporation was a dealer liable to sales tax on sale of unserviceable materials such as tyres, tubes and spare parts, and whether such sales constituted transactions of trade or commerce under the definition of business in the State sales tax law.

Analysis: The definition of dealer turns on carrying on the business of buying, selling, supplying or distributing goods. The amended definition of business is wide and includes trade, commerce and transactions of sale or purchase incidental or ancillary to the main business, without requiring a profit motive. Sales of unserviceable, discarded or scrap goods arising in the course of the assessee's transport activity fell within that enlarged concept. The cited precedents also supported the view that such disposals by bodies carrying on the main business are taxable when the statutory definition of business is similarly expanded.

Conclusion: The Corporation was liable to sales tax on the auction sales of unserviceable materials, and the question was answered in the affirmative in favour of the Revenue and against the assessee.

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