Port Trust ancillary receipts are not taxable unless they arise from business activity under sales tax law.

A Port Trust is not treated as a dealer liable to sales tax on receipts from tender forms, cranage, pilotage and similar ancillary services unless those activities amount to business under the Andhra Pradesh General Sales Tax Act, 1957. The statutory definition of dealer, read with the charging provision, requires a business activity; mere receipt of money from functions connected with port operations is insufficient. Explanation IV to section 2(e) enlarges the class of persons covered, but does not remove the need to prove business. On that basis, the disputed receipts were regarded as part of statutory port functions and not taxable business turnover.

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Issues: Whether the Port Trust, in respect of sale of tender forms, cranage, pilot-age and allied receipts, was a dealer carrying on business so as to be liable to tax under the Andhra Pradesh General Sales Tax Act, 1957, notwithstanding Explanation IV to section 2(e).

Analysis: The definition of dealer under section 2(e), read with the charging provision in section 5, fastens liability only on a person carrying on business. The Port Trust's functions are statutory obligations under the Major Port Trusts Act, 1963, and the receipts in question arise from ancillary or incidental service activities connected with that statutory function. A mere enlargement of the class of persons mentioned in Explanation IV does not dispense with the essential requirement that the activity must still amount to business within the meaning of the Act. The settled position in the earlier decisions, including the Supreme Court's exposition on similar port activities, is that connected or ancillary sales do not become business unless an independent intention to conduct business is shown.

Conclusion: The Port Trust was not carrying on business and therefore was not a dealer liable to assessment on the disputed receipts. Explanation IV did not authorise taxation of the impugned transactions in the absence of business activity.

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