TaxTMI 
TaxTMI 
1964 (8) TMI 65
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....MHAM, J.-These two revision petitions are preferred by the State of Andhra Pradesh under section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (Act No. 6 of 1957) against the orders of the Appellate Tribunal excepting certain sales of commodities by Messrs. Gannon Dunkerley & Co., Madras (Private) Ltd., from the taxable turnover for the assessment years 1958-59 and 1959-60. T.R.C. No. 44 of 1963 relates to the assessment year 1958-59 and T.R.C. No. 45 of 1963 to the assessment year 1959-60. The Appellate Tribunal held that the sales were not taxable as they were not regular dealers in the commodities sold. The facts are these: Messrs. Gannon Dunkerley & Co., Madras (Private) Ltd., are works contractors and registered dealers in....
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....he sales of articles like cement bags, casurina poles, iron scrap, etc., were properly excluded by the Appellate Tribunal. Sri Ranganathachari argued (1) that the sales of the said items did not arise in the course of the assessee's business, (2) that the transaction of disposal of the said articles did not amount to sales within the meaning of the Act, and (3) that there was no profit making motive in the said sales. We will presently examine these contentions. The term "sale" is defined in section 2(n) of the Act as meaning "every transfer of the property in goods by one person to another in the course of trade or business for cash, or for deferred payment, or for any other valuable consideration, etc." Section 2(e) defines "dealer" as me....
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....d that they were not dealers in those materials and that the sales of those materials were only incidental to the carrying on of the contract work. That contention was overruled with the reasoning which appears at page 45: "It seems to us that in these circumstances when the assessee is undoubtedly a dealer and the necessity of disposal of the surplus material is ingrained in the very nature of the business which the assessee carries on and he has to effect sales of such surplus material there is no reason why he cannot be regarded as a dealer selling goods in the course of his business." The learned Judges observed further that the question to be considered in a case of this kind was whether the sale in question was a business activi....
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.... (at page 884): "The test, in our opinion, then is to ascertain whether in the circumstances and on the facts of the case it can be said that a particular sale is a sale in the course of business of a dealer. If the sale has a reasonable connection with the nature of the business carried on by a dealer, then the sale would be in the course of his business. If there is no such reasonable connection between the sale effected and the nature of the business carried or by the dealer, then the sale cannot be said to be in the course of the business of the dealer, and its sale proceeds cannot therefore be included in his turnover." Sri Ranganathachari relied on Ambica Mills Ltd., and Others v. State of Gujarat and Another[1964] 15 S.T.C. 367. I....