TaxTMI 
TaxTMI 
1980 (8) TMI 174
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....e assessee carries on business of manufacture and sale of textiles in a factory situate in the State of Tamil Nadu. It is one of the leading manufacturers of textiles in the country. It is running a store in the premises of the factory where workmen can buy provisions. In the course of assessment of the assessee to sales tax for the assessment year 1967-68 under the Tamil Nadu General Sales Tax Act, 1959, the question arose whether the sales effected by the assessee in the store were taxable. The assessee contended that in respect of the sales effected by it in the store it was not carrying on a business within the meaning of section 2(d) of the Act because there was no profit-motive in running the store and this activity was being carried ....
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....n the Burmah Shell case [1973] 31 STC 426 (SC) and in the judgment delivered in that case Jaganmohan Reddy, J., speaking on behalf of the court, pointed out that the view taken in the Thirumagal Mills case [1967] 20 STC 287 did not take into account the word "such" in clause (ii) of section 2(d) of the Act and the Madras High Court was in error in holding that in order to come within clause (ii) of section 2(d), it was necessary to show that the transaction had the characteristics of business. Section 2(d) as it stood after its amendment from 1st September, 1964, defined "business" in the following terms: "Section 2. (d) 'business' includes- (i) any trade, or commerce or manufacture or any adventure or concern in the nature of trade, ....
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....e, in the submission of Mr. S. T. Desai, appearing on behalf of the State, in connection with or incidental to such business. This contention was seriously disputed by Mr. Ramachandran on behalf of the assessee and he urged that there was no connection between the activity of manufacture of textiles carried on by the assessee and the sales of provisions in the store maintained by it nor was it possible to say that the sales effected by the assessee were incidental to the manufacture of textiles. Mr. Ramachandran contended that in order to attract the applicability of clause (ii) of section 2(b) it was necessary that the connection between the sales of provisions in the store and the manufacture of textiles must be direct and such direct con....
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.... statute requires is that the work should not be irrelevant to the purpose of the establishment". Now, if a canteen maintained by a cinema owner for the benefit of cinema goers can be regarded as incidental to the purpose of the cinema theatre which is to carry on the business of exhibiting films in the theatre, we fail to see how a store run by the owner of a textile undertaking for sale of provisions to the workmen employees in the factory can be said to be anything other than incidental to the business of manufacture of textiles. We are clearly of the view that the activity of selling provisions to workmen in the store was incidental to the business of manufacture of textiles and the sales were, therefore, transactions falling within the....