TaxTMI 
TaxTMI 
2010 (7) TMI 930
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....hed in the Economic Times dated September 3, 2003 by the official liquidator attached to the High Court of Karnataka, the petitioner made a bid. The petitioner was declared the successful bidder for the plant and machinery by virtue of an order passed by this court in O.L.R. No. 89 of 2004 confirming the sale of machinery which was handed over to the petitioner on March 13, 2004. The sale certificate dated March 13, 2004 came to be issued stating that the plant and machinery was sold for a consideration of Rs. 101 lakhs to the peti tioner. The sale of goods was effected by the official liquidator who sold the property of M/s. Powerflow Ltd., which has gone into liquidation. There fore, the official liquidator was not a dealer as defined under section 2(1)(k) of the Act and he could not have collected any sales tax. Accordingly, it was not so done. A notice was issued to the petitioner calling upon him to get himself registered as a nonresidential dealer and pay tax on the aforesaid purchase. In reply to the same, it was contended by the petitioner that as he was not carrying on any business in the State of Karnataka, there was no necessity to get himself registered as a dealer und....
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....peruse the observations made by the honourable Supreme Court in the case of State of Gujarat v. Raipur Manufacturing Co. Ltd. reported at [1967] 19 STC 1, wherein their Lordships have observed as follows (page 1 in 19 STC): "Whether a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the trans actions must ordinarily be entered into a profit motive. . ." The honourable Supreme Court of India in its judgment rendered in the case of Manipur Administration v. M. Nila Chandra Singh AIR 1964 SC 1533, has held as under: "The definition in clause 2(a) shows that before a person can be said to be a dealer it must be shown that he carries on business of purchase or sale or storage for sale of any of the commodities spec ified in the Schedule, and that the sale must be in quantity of 100 Mds. or more at any one time. The requirement is not that the person should merely sell, purchase or store the foodgrains in question, but that he must be carrying on the business of such purchase, sale, or storage; and the concept of business in the context must necessarily po....
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....amil Nadu v. Thiru Murugan Brothers [1988] 68 STC 412 (SC) has stated hold as under (page 413 in 68 STC): "(ii) that, however, since the respondent was a dealer i publicity material who had been constrained to part with the unfinished film, it was a solitary transaction, neither in the course of the respondent's business nor with a profitmotive. The transaction, having taken place in 1963, did not fall within the restricted scope of the definition of 'business' as contained in section 2(d) of the Act, before amendment in the year 1964, and was, therefore, not liable to tax under the Act." A threejudge Bench of the honourable Supreme Court in its decision rendered in the case of The Sole Trustee, Loka Shikshana Trust v. Commissioner of Incometax, Mysore [1975] 101 ITR 234 (SC); AIR 1976SC 10 has enunciated as under (pages 243 and 244 in 101 ITR): "9. It is true that there are some business activities like mutual insurance and cooperative stores of which profitmaking is not an essential ingredient, but that is so because of a selfimposed and innate restriction on making profit in the carrying on of that particular type of business. Ordinarily profitmotive is a normal i....
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.... or contemplated to be continued with a profitmotive; there must be some real and systematic or organised course of activity or conduct with a set purpose of making profit. . ." There cannot be any quarrel in respect of the aforesaid legal proposition. A single, casual or a solitary transaction of sale or purchase would not make a person a dealer within the meaning of the Act. But in the instant case, it is an admitted fact that the petitioner is a dealer who is duly registered in the State of Gujarat both under the Central Sales Tax Act as well as under the Gujarat State Act. The registration certificate discloses that nature of business of the petitioner is resale of machinery, in partic ular, ball bearing and copper wire. Therefore, the petitioner is a dealer carrying on the business of resale of certain items of machine. Such a dealer has come to Karnataka State and has purchased used machinery in an auction sale. After such purchase, he has despatched the same to the State of Gujarat. In the aforesaid judgments of the apex court what has been stated is that, if a person purchases machinery as a solitary instance, the said purchase would not make him a dealer. But in the insta....