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Issues: Whether the official liquidator, while selling assets of a company in liquidation under the sanction of the court, falls within the definition of "dealer" under section 2(viii) of the Kerala General Sales Tax Act, 1963 and is therefore bound to collect sales tax on such sales.
Analysis: The expression "dealer" under section 2(viii) of the Kerala General Sales Tax Act, 1963 requires a person to be carrying on the business of buying or selling goods. Applying the settled principle that the main and dominant activity must amount to business, the Court held that sales effected by the official liquidator are only incidental and connected with his statutory duty in winding up the company. The liquidator does not conduct a profit-making business, and the mere fact of official appointment by the Central Government does not alter the nature of the function performed. In the absence of independent intention to carry on business in such sales, the burden of establishing taxable business activity was not discharged.
Conclusion: The official liquidator is not a dealer under the Act and is not bound to collect sales tax on the sale of assets of the company in liquidation.
Ratio Decidendi: Where the main activity is not business, incidental or ancillary sales do not amount to business unless an independent intention to carry on business in those sales is shown by the revenue.
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