Dealer status and taxable turnover for discarded materials excluded when sales were not part of trading business.

Under the pre-1974 definitions of "dealer" and "business" in the Kerala General Sales Tax Act, the decisive question was whether the assessees carried on the business of buying or selling discarded items such as empty tins, cashew shells and gunnies. The court treated the sale of such discarded materials as outside the assessees' taxable trading activity in those items, and accepted that the earlier Carborundum Universal Ltd. decision remained consistent with the Supreme Court's principles on the scope of "business" and "dealer". The assessees were therefore not dealers in respect of the discarded items, and the sale proceeds were not includible in taxable turnover.

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Issues: Whether the sale proceeds of discarded items such as empty tins, cashew shells and gunnies were includible in the assessees' taxable turnover under the Kerala General Sales Tax Act, 1963, and whether the assessees could be treated as dealers in respect of those items.

Analysis: For the assessment years in question, the governing definitions were those of "dealer" and "business" as they stood before the 1974 amendment. On that basis, the decisive question was whether the assessees carried on the business of buying or selling the discarded items themselves. The earlier decision in Carborundum Universal Ltd. was held to be consistent with the principles stated by the Supreme Court on the scope of "business" and "dealer" under the sales tax law, and the sale of discarded materials was not treated as part of the assessees' taxable trading activity in those items.

Conclusion: The assessees were not dealers in respect of the discarded items, and the proceeds from their sale were not includible in taxable turnover; the exemption was upheld.

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