TaxTMI 
TaxTMI 
1988 (7) TMI 400
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....ions created by the Central Government to carry on "all kinds of business relating to fertilisers and chemicals", including distribution, transportation, buying and selling of fertilisers (vide clause 1(a) of the Memorandum of Association]. For the assessment year 1973-74 the petitioner filed a return disclosing the gross turnover of Rs. 67,44,358.92 and claimed total exemption in respect of the said turnover. For the assessment year 1974-75 the petitioner disclosed a gross turnover of Rs. 1,50,88,621.29. It again claimed total exemption for the said turnover. The assessing authority, however, rejected the petitioner's contention. For the assessment year 1973-74 it granted exemption in respect of turnover for an amount of Rs. 6,13,123.54 and brought the remaining turnover to tax. For the next assessment year no part of turnover was granted exemption. The appeals preferred by the petitioner were partly allowed, but dismissed so far as the controversy herein is concerned. The matter was then carried to the Tribunal, but without success. During the relevant period, the expression "dealer" was defined in clause (b) of section 2 of the Act in the following words: "'Dealer' means a....
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....llant-Corporation was intended to take upon this work as an opportunity to develop and help grow its own marketing facilities in anticipation of its future selling of its own manufactured fertilisers. In accordance with the instructions in the said letter, the State Director of Agriculture informed the Fertilisers Corporation of India the quantities to be despatched to various towns in Andhra Pradesh. In his letter dated 9th July, 1973, the State Director of Agriculture further informed the appellant-Corporation that the Ministry of Food and Agriculture has requested to reallot the quantity allotted to the State Government in favour of the Fertilisers Corporation of India for distribution in the State. The Director of Agriculture accordingly requested the appellant Corporation to make financial arrangements for the allotted quantities so as to enable the Director to issue despatch instructions as to the quantities meant for various distribution places in the State. The Fertilisers Corporation of India thereupon informed the Food Corporation of India the details of the remittances made and the quantities to be sent to the various distribution places in the State, as per the advice o....
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....s the motive, i.e., profit-motive. It is not necessary that profit should actually result. In a given case, profit, may result, and in another case it may result in loss; in a third case there may be no profit and no loss. What. is relevant is: with what motive a person is undertaking a particular activity? It may also be seen that the main business of the petitioner was distribution and sale of fertilisers. The activity in question is not something else, but the very same activity; the only difference is that this was undertaken under a particular programme evolved by the Government. That, in our opinion, makes no difference. Instead of designating another Corporation or person, the petitioner was designated for distributing fertilisers under the said programme, and it was provided a certain margin in consideration of the services rendered by it till 1st August, 1974. We are, therefore, of the opinion that not only the distribution of fertilisers under the said programme up to 1st August, 1974, but even thereafter the said activity was undertaken by the petitioner with a profit-motive. The Tribunal was, therefore, right in holding that the petitioner was carrying on business while....
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....ink that the principle of this decision has any application herein. As pointed out by us hereinbefore, the main business of the petitioner-Corporation was distribution and sale of fertilisers, and the activity in question was equally the sale and distribution of fertilisers. The only difference is that this particular activity was relatable to a distinct programme evolved by the Government. In our opinion, this circumstance makes very little difference, more particularly when up to 1st August, 1974, a margin was provided to the Corporation by way of consideration for the services rendered by it. This is not a case where some discarded material was sold as in the case before the Supreme Court, which could not have been termed as the business of the assessee therein. Moreover, in that case it was not found that the said selling of discarded items was being done in a systematic manner. Even if it is held that one' must look to this particular activity under the "seeding programme operations" as a distinct activity, even then we are not satisfied that there was no profitmotive, as explained hereinbefore. Counsel for the petitioner then relied upon the decision of the Supreme ....