TaxTMI 
TaxTMI 
1987 (7) TMI 542
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....Mills Ltd. v. Commissioner of Sales Tax, M.P.), M.C.C. No. 110 of 1985 (Hukamchand Mills Ltd. v. Commissioner of Sales Tax, M.P.) and M.C.C. No. 111 of 1985 (Hukamchand Mills Ltd. v. Commissioner of Sales Tax, M.P.) as in all these references, made at the instance of the assessee under section 44(1) of the M.P. General Sales Tax Act, 1958 and section 9(2) of the Central Sales Tax Act, 1956, the Board of Revenue has referred the following common question of law for the opinion of this Court, which arises in all these cases: "Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the sales of materials like discarded machinery, chemicals, scrap, empty drums, unsuitable and unserviceable stores, etc., were....
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....ceable surplus and/or discarded material like chemicals, scrap, empty drums, etc. Before the assessing authority it was contended on behalf of the applicant that these sales were not made in the course of the business of the assessee and the applicant could not be considered as a dealer in respect of these sales. It was also contended that the aforesaid sales in fact were casual sales and consequently the same were not taxable. The assessing authority, however, rejected the contention of the applicant. An appeal filed by the applicant before the Deputy Commissioner of Sales Tax, Indore, was dismissed who confirmed the assessment order passed by the Assistant Commissioner of Sales Tax. The second appeal filed by the applicant before the Trib....
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....discarded machinery, chemicals, scrap, empty drums, unsuitable and unserviceable stores were not made with a view to earn profit. He also submitted that the respondent has not placed any material on record nor there is any evidence to infer that these sales of such items in dispute had been made to reduce cost of production and thus cut down losses, which otherwise would accrue. The learned counsel further submitted that considering the nature and extent of business carried on by the petitioner there was bound to be frequency and continuity of sales of such materials every year, but unless there is any evidence and material on record to indicate that these sales were effected with a profit-motive, no tax could be levied on the sales of such....
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.... in entering into the series of transactions of purchase and sale. A similar inference may be raised where a person manufactures finished goods from raw materials belonging to him or purchased by him and sells them. But where a person comes to own in the course of his business of manufacturing or selling a commodity, some other commodity which is not a bye-product or a subsidiary product of that business and he sells that commodity, cogent evidence that he has intention to carry on business of selling that commodity would be required. Where a person in the course of carrying on a business is required to dispose of what may be called his fixed assets or his discarded goods acquired in the course of the business, an inference that he desired ....
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....ofit, or indirectly reduce the cost of production of goods in the business of selling in which he is engaged. An attempt to realise price by sale of surplus unserviceable or discarded goods does not necessarily lead to an inference that business is intended to be carried on in those goods, and the fact that unserviceable goods are sold and not stored so that badly needed space is available for the business of the assessee also does not lead to the inference that business is intended to be carried on in selling those goods." 11.. It is, therefore, clear in the present case that it is not the business of the petitioner to sell these materials with a profit-motive as there is no evidence on record to reach that conclusion, even though it was ....