DEPB licence transfers taxed as incidental business transactions under the expanded sales tax definition.

Under the amended sales tax definition of business, transactions connected with or incidental to trade, commerce or manufacture are taxable. The sale and transfer of DEPB licences, being linked to export activity and arising under the foreign trade policy on the basis of export volume and value, fell within that expanded definition. The court held that the transfers were not stray or isolated dealings outside the business sphere, and the absence of a separate purchase of the licences did not change their tax character. The assessee's challenge therefore failed, and the transfers were exigible to sales tax as business transactions.

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Issues: Whether the sale and transfer of DEPB licences by the assessee constituted business or transactions incidental or ancillary to its main business, so as to attract sales tax under the amended sales tax definitions.

Analysis: The amended definition of business under the State sales tax law included not only trade, commerce or manufacture, but also any transaction in connection with, or incidental or ancillary to, such activity. The Court held that the earlier decisions relied on by the assessee turned on unamended definitions or materially different facts. The sale of DEPB licences was linked to the assessee's export activity and arose under the foreign trade policy on the basis of export volume and value. In that context, the transfer of DEPB licences could not be treated as a stray or isolated activity outside the business sphere. The absence of direct purchase of the licence did not alter the character of the transaction for tax purposes.

Conclusion: The sale and transfer of DEPB licences were taxable as business transactions incidental to the assessee's business, and the assessee's challenge failed.

Ratio Decidendi: Under an amended sales tax definition that includes transactions connected with or incidental to trade, commerce or manufacture, a transfer of DEPB licences arising from export activity constitutes business and is exigible to tax even without proof of a separate independent licence-trading business.

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