Business and dealer status under sales tax law require profit motive and regular commercial activity, not incidental disposals.

The Bombay HC considered whether the applicant's transport operations and intermittent sale of scrap, unserviceable vehicles and materials amounted to "business" under the Bombay Sales Tax Act, 1959, so as to make it a "dealer". It held that business under section 2(5A) required a profit motive during the relevant period, and that dealer status under section 2(11) depended on carrying on the business of buying or selling goods. The transport activity was a statutory public service at controlled fares, not a profit-making venture, and the disposal of old assets lacked the frequency, continuity and regularity needed to constitute a separate business. The applicant was therefore not a dealer for those transactions.

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Issues: Whether, during the relevant period, the applicant's transport activity and the sale of scrap, unserviceable vehicles and materials constituted "business" so as to make it a "dealer" under the Bombay Sales Tax Act, 1959, and whether the applicant was liable to be treated as a dealer for those disposals.

Analysis: The definition of "business" under section 2(5A) required profit motive during the relevant period, and the definition of "dealer" under section 2(11) operated only where a person carried on business of buying or selling goods. The applicant's transport function was a statutory obligation undertaken to provide public transport at controlled fares and not as a profit-making venture. The disposal of old buses, spare parts and scrap occurred only intermittently, after long use, and lacked the volume, frequency, continuity and regularity needed to characterise such disposals as a separate business. The statutory explanation treating certain bodies as deemed dealers did not support treating the applicant's transport activity as business in the relevant period.

Conclusion: The applicant was not carrying on business in relation to its transport activity or the sale of scrap and unserviceable material during the relevant period, and was not a dealer within section 2(11) for those transactions.

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