Incidental disposal of unserviceable goods can amount to business, making a transport corporation a dealer for sales tax purposes.

Disposal of unserviceable chassis, tyres, tubes, spare parts and vehicles by a transport corporation was treated as business because the sales were incidental and ancillary to its commercial activity and were carried on with sufficient volume, frequency, continuity and regularity. The Court held that a profit motive was not necessary for such transactions to fall within the wide definition of business under the Himachal Pradesh General Sales Tax Act, 1968, and that the corporation was therefore a dealer for sales tax purposes. The retrospective amendment to the Act was upheld, and the challenge to its retrospective operation failed.

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Issues: Whether the disposal of unserviceable chassis, tyres, tubes, spare parts and vehicles by the Corporation constituted business so as to make it a dealer under the Himachal Pradesh General Sales Tax Act, 1968.

Analysis: The definition of business under section 2(aa) is wide and includes transactions incidental or ancillary to trade, commerce or manufacture, even where no profit motive is shown. Sales of discarded or unserviceable articles may still fall within business when they are connected with the main activity and occur with sufficient volume, frequency, continuity and regularity. The Court relied on the principle that disposal of scrap, spare parts and similar unserviceable materials by a transport undertaking is ancillary to its commercial activity and is not outside the taxing net merely because the goods are not acquired for resale. The retrospective amendment to the Act was also held to apply, and the challenge to its retrospective operation was rejected.

Conclusion: The Corporation was held to be a dealer within the meaning of the Act, and the reference was answered in the affirmative against the assessee.

Ratio Decidendi: Where the disposal of unserviceable goods is incidental or ancillary to the assessee's commercial activity and is carried on with sufficient regularity, it constitutes business for sales tax purposes and the assessee is a dealer.

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