TaxTMI 
TaxTMI 
2012 (4) TMI 550
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....ness' for the purpose of the Bombay Act? (b) Whether, on the facts and in the circumstances of the case and on true and correct interpretation of the provisions in section 2(5A) and section 2(11) of the Bombay Act, as obtaining during the relevant assessment periods, the Tribunal was legally justified in holding that the appellant is a 'dealer' carrying on business of buying or selling of goods and that therefore his sales of scrap material, etc., effected during the said periods are liable to tax under the Bombay Act?" The tax demand involved in all these appeals relates to the period from April 1, 1976 to March 31, 1984. For the sake of convenience, we set out facts relevant to Sales Tax Reference No. 23 of 2008. Counsel for the parties agree that the decision in Sales Tax Reference No. 23 of 2008 would apply to all the remaining references. The applicant ("the assessee" for convenience) originally a Department of the Central Government (now a Corporation with effect from April 1, 1986), is engaged in the activity of providing telecommunication facilities in India and abroad. While providing the aforesaid facilities, the assessee occasionally sold old tele....
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....be held to be a dealer under section 2(11) of the Bombay Sales Tax Act liable to sales tax. Accordingly, all the appeals filed by the assessee were dismissed by the Tribunal. On reference applications filed by the assessee, the Tribunal has referred the aforesaid questions for the opinion of this court. The question as to whether the telecommunication services rendered by the assessee amounts to carrying on business under the Bombay Sales Tax Act or not was not an issue raised or decided in the assessment orders passed in the years in question. Even the first appellate authority has only held that the incidental activity of selling the scrap amounts to "sale" under the Bombay Sales Tax Act. It was not the case of the Revenue before the Sales Tax Tribunal that the main activity of providing telecommunication services constitutes business activity. The fact that the Sales Tax Tribunal is empowered to enhance the assessment does not mean that the Tribunal can travel beyond the scope of the appeal especially when the Revenue is not even aggrieved by the assessment order. Therefore, the decision of the Tribunal to the extent it holds that the main activity of the assessee, viz., prov....
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....n, the sales/purchases of scrap materials by the entities covered under the Explanation to section 2(11) of the Bombay Sales Tax Act could not be said to be covered under the Bombay Sales Tax Act. Even after the insertion of Explanation to section 2(11) with effect from August 16, 1985, disputes arose as to whether sale of scrap/discarded materials without any profit-motive by the entities covered under the Explanation to section 2(11) would constitute "business" as defined under section 2(5A) of the Bombay Sales Tax Act and if not, whether such sales and purchases can be subjected to tax under the Bombay Sales Tax Act. To plug the loophole, the Legislature by the 1989 Act once again amended the expression "business" in section 2(5A) of the Bombay Sales Tax Act with retrospective effect from August 16, 1985. As a result of the aforesaid amendment, the transactions of sale and purchase of scrap/ disposal materials effected by the entities specified in the Explanation to section 2(11) of the Bombay Sales Tax Act (which includes the assessee) became business transactions carried on by the deemed dealers liable to tax with effect from August 16, 1985. In the present case, we a....
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.... Act on the one hand seeks to validate the demands confirmed during the period from January 1, 1960 till the commencement of the 1989 Act as if the said demands have been confirmed under the provisions of the Bombay Sales Tax Act as amended by the 1989 Act. Section 30(4) of the 1989 Act on the other hand grants immunity from payment of tax if sales and purchases during the aforesaid period were effected without collecting tax on the ground that such sales were not effected with a motive to make gain or profit and that no such tax could have been levied or collected if the amendments made in the Bombay Sales Tax Act by the 1989 Act had not been made. It is relevant to note that section 30(4) of the 1989 Act specifically denies the immunity from payment of tax to the deemed dealers covered under the Explanation to section 2(11) of the Bombay Sales Tax Act. The reason for such exclusion is that the main object of the 1989 Act was to amend the expression "business" in section 2(5A) of the Bombay Sales Tax Act with retrospective effect from August 16, 1985 so as to tax the deemed dealers covered under the Explanation to section 2(11) of the Bombay Sales Tax Act with effect from Augus....
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.... for the period subsequent to the retrospective amendment to the definition of the expression "business" in section 2 of the Rajasthan Sales Tax Act, 1954 by the Rajasthan Taxation Laws (Amendment) Act, 1965, whereas, in the present case, we are concerned with the period prior to the amendment of the expression "business" in section 2(5A) of the Bombay Sales Tax Act by Maharashtra Act IX of 1989. The apex court in the aforesaid case has clearly held that even if it be assumed that the activity involved in selling the unserviceable material and scrap, etc., would not amount to carrying on business in the normal connotation of that term, it would be "business" within the amended definition of the expression "business". Therefore, in the facts of the present case, since the tax demand relates to the period prior to the amendment of the expression "business" in section 2(5A) of the Bombay Sales Tax Act by Maharashtra Act IX of 1989, the aforesaid decision of the apex court would not be applicable to the facts of the present case. Similarly, the decision of this court in the case of Controller of Stores [1995] 99 STC 222 (Bom); 12 MLJ 88 (Bom) does not support the contention of the R....