TaxTMI 
TaxTMI 
1960 (9) TMI 88
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....ealer, is a dealer within the meaning of section 4 of the C.P. and Berar Sales Tax Act? (2) Whether the assessee is liable to pay sales tax on such sales? (3) Whether the Board of Revenue could take oral submissions on question of fact into consideration when there was a clear finding of the Sales Tax Commissioner regarding frequency of sales and profits made by the assessee on the sales in question? 2.. The questions arise in the following circumstances. The Bengal Nagpur Cotton Mills Ltd., Rajnandgaon, gave a contract for the construction of some buildings to J.K. Mitra & Co. The mills obtained steel and cement required for the constructional work and handed over the material to their contractors. The price of the material was de....
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....) as under " 'sale' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods made in course of the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge; and the word "purchase" shall be construed accordingly. Under section 5 of the Act sales tax is payable by a dealer on his taxable turnover of the goods specified in the schedule as liable to tax. The Sales Tax Act does not impose sales tax on all goods but only on those goods specified in Schedules I and II. It does not again impose the tax on the mere sale or purchase of the goods specifie....
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....eir contractors was in no sense a "sale" by the mills as a "dealer". The price of the material, if debited to the account of the contractors, would at the most show that the transaction of the supply of material was a transaction of sale. But that cannot lead to the conclusion that the sale was by the mills as a dealer carrying on the business of selling or supplying steel and cement. The object of the supply of the material by the mills to the contractors was the use of the material in the construction of their own buildings which the contractors had undertaken. The object was not the sale of the material simpliciter. If the mills had not supplied the material, the contractors would have purchased it and included its price in their bill fo....
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....t it was with the object of selling them to anyone at profit. The material was obtained by the mills for their own use. Before the Board of Revenue, the department relied on the circumstance that the assessee's accounts revealed that in some cases the amount debited to the contractors for the material supplied to them was slightly in excess of the price actually paid by the mills and thus the mills earned a profit in the supply of the material to the contractors. The assessee explained this by saying that this was due to the inclusion of the cost of transport. This circumstance does not in any way indicate that the mills carried on the business of selling and supplying steel and cement with a view to earn profit. As already stated, the test....
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....merely the act of selling as defined in the Act which constitutes a person a dealer. The activity which the person must indulge in is not merely the activity of selling in the sense of transferring property in goods, but it must be the activity of carrying on the business of selling or supplying goods. What the Legislature has emphasised is not the act or the activity of selling but the act or activity of carrying on the business." It must be noted that the Bombay case was on facts somewhat similar to the one before us. In that case the Ahmedabad Education Society, which had as its object the spread of education in all its branches, gave a contract for the construction of some buildings to a contractor. The society set up a brick factory of....