Expanded definition of business under sales tax law did not apply retroactively to a pre-cutoff machinery sale after closure.

The scope of "business" under the Bombay Sales Tax Act, 1959 was expanded by the 1988 amendment to include transactions connected with, incidental to, or ancillary to the commencement or closure of trade, commerce, manufacture, adventure or concern, but only with retrospective effect from 1 July 1981. Because the sale of machinery occurred on 10 January 1979, before that cut-off date and after cessation of production, it was held not to be a transaction in the course of business and not liable to tax. The reference on that issue was answered in the negative and in favour of the assessee.

---

---

Issues: Whether the sale of machinery effected after cessation of production, claimed as closure of business, was a sale in the course of business and liable to tax under the Bombay Sales Tax Act, 1959.

Analysis: The reference turned on the scope of the definition of "business" under the Bombay Sales Tax Act, 1959. The amendment made by Maharashtra Act No. 9 of 1988 expanded the definition to include transactions in connection with, incidental to, or ancillary to the commencement or closure of trade, commerce, manufacture, adventure or concern. The amendment was given retrospective effect only from July 1, 1981. In view of that cut-off date, the Revenue fairly did not press a contention that the amended definition should be applied to earlier transactions.

Conclusion: The sale of machinery effected on January 10, 1979, after cessation of production, was not liable to tax as a transaction in the course of business. The question was answered in the negative and in favour of the assessee.

---