1991 (7) TMI 314

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....e controversy raised before us. The assessee is an association called Cement Research Institute of India. The objects of the association are to promote research and other scientific works connected with the cement trade or industry of trades and industries allied thereto, as also to maintain laboratories, workshops and conduct experiments. It is an institution initiated by the cement industry and supported by the Council of Scientific and Industrial Research of the Government of India. The organisation comes under the overall administrative control of the Government of India and is financed in equal proportion by the Government of India and its members. The assessee purchased raw materials like limestones, gypsum, laterite, sand, etc., f....

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....urchased. The Tribunal found that an analysis of the transaction went to establish that the same did not result in any taxable event under the sales tax law. The Tribunal relying upon the law laid down by this court in Deputy Commissioner (C.T.) v. South India Textile Research Association [1978] 41 STC 197 found in favour of the assessee on all the points. The learned Government Advocate appearing for the Revenue submitted that the assessee is a dealer and his activity would be covered by section 2(d) of the Tamil Nadu General Sales Tax Act, 1959. It was submitted that though the assessee consumed the raw materials in the course of their research, the sale of the product of research was in the nature of a commercial activity of the asses....

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.... Tribunal found that the cement which was produced as a result of the research work was sold but that sale was considered as not a trading or a commercial activity. It was found that there was no commercial activity at all carried on by the assessee in respect of the cement manufactured by it. On these facts, the Tribunal considered whether the activity of the assessee can be said to be covered by the definition of the term "business" as contained in section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, and found in the negative. In our opinion also, the assessee cannot be said to be doing any business in the nature of trade or commerce and, therefore, the transactions cannot be brought within the definition of the term "business" ....