LexSTATE OF TAMIL NADU AND ANR. versus BOARD OF TRUSTEE OF THE PORT OF MADRAS
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
STATE OF TAMIL NADU AND ANR. A v. BOARD OF TRUSTEE OF THE PORT OF MADRAS MARCH 26, 1999 [M. JAGANNADHA RAO AND S.N. PHUKAN, JJ.] B Sales Tax-Tamil Nadu General Sales Tax Act 1959, Ss. 2 (d) r/w. 2 (g) (iii)-Major Port Trusts Act 1963, Ss. 35 (a) to (g)-Whether Port Trust was 'carrying on business' and was therefore a 'dealer' for the purpose of sale tax-Held, ncr-lnterpretation of Statutes C Prior to 1959, the Respondent Madras Port Trust was sought to be assessed to sales tax under the Madras General Sales Tax Act, 1939 in respect of charges collected for water supplied by it to ships. The Madras High Court in Trustees of the Port Trust 6f Madras v. State of Madras, (1960) D 11 S;TC 224 (Mad) held that the Respondent was not "carrying on any business" of buying and selling with a view to making profit and that supplying water to ships was only a discharge of a statutory duty imposed upon it. The Respondent was thus not a "dealer". The 1939 statute was replaced by the Tamil Nadu General Sales Tax E Act, 1959 (Act). S.2 (g) (iii) of the Act defined 'business' to include an activity whether or not carried on with a profit motive. Again, in State of Madras v. Trustees of Port of Madras, (1974) 34 STC 135 (Mad), the Madras High Court held that the Respondent was not liable to sales tax since it was not a 'dealer' carrying on the business of selling goods as a commercial venture in the course of the exercise of its statutory duties. F In 1992, s. 2(g) (iii) of the Act was amended to include within the definition of 'dealer' a factor, broker or a commercial or any other mercantile agent who carried on the business of bnying and selling goods on behalf of any principal or through whom the goods were bought, sold, supplied or distributed. The Commercial Tax Officer issued a notice calling upon the G Respondent to register itself as a dealer under the Act. The Respondent's writ petition challenging the notice was dismissed by a Single Judge of the Madras High Court holding that the amended definition of 'dealer' was wide enough to cover the Respondent. The Division Bench, however, allowed the Respondent's appeal and held that there was no H 195 196 SUPREME COURT REPORTS [1999) 2 S.C.R. A element of profit or gain in the duties discharged or servkes rendered by the Respondent and these did not constitute "business". Therefore, the Respondent was not a 'dealer' under s.2 (g) of the Act. Dismissing the appeal, this Court B HELD: 1.1. The sales made by the Port Trust were not exigible to sales c tax. [219-F] State of Madras v. Trustees of Port Trust of Madras, (1974) 34 STC 135 (Mad) and Board of Trustees of the Visakhapatnam Port Trust v. Commercial Tax Officer, (1979) 43 STC 36 (AP), approved. 1.2. The Port Trust was not involved in any activity of carrying on business. The sale of unclaimed and unserviceable goods was in discharge of various statutory charges and was an infinitesimal part of its main activities or services. [219-B) Trustees of Port of Madras v. Mis Aminchand Pyarelal, [1976) 1 SCR 721, followed. Trustees of the Port Trust of Madras v. State of Madras, (1960) 11 STC 224 Mad; State of Madras v. Trustees of Port of Madras, (1974) 34 STC 135; E State of A.P. v. H Abdul Bakhi & Bros, AIR (1965) SC 531; Board of Revenue v. A.M Ansari, [1976) 3 SCC 512; Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue, West Bengal, Calcutta, AIR (1967) SC 1826; Government Medical Store Depot Gauhati v. Superintendent of Taxes, Gauhati, [1985) 4 SCC 239; Government Medical Store Depot, Karna! v. State of Haryana, [1986) 3 SCC 66; State of Punjab v. Assessing Authority, F Chandigarh, [1991) Supp. 1 SCC 153; State of Gujarat v. Rajpur Manufacturing Co. Ltd, AIR (1967) SC 1066; State of Gujarat v. Vivekanand Mills, (1967) 19 STC 103 SC ; State of Gujrat v. Arvind Mills Ltd, (1967) 19 STC 12 SC; State of Gujarat v. Ambica Mills Ltd., (1967) STC 12 SC; Hindustan Steels Ltd. v. State of Orissa, AIR (1970) Sc 253; State of Tamil G Nadu v. Mis Burmah Shell Oil Storage and Distributing Co. of India Ltd., [1973) 3 SCC 511; Raipur Manufacturing Co. Case, AIR (1967) SC 1066; Hyderabad Asbest~'s Cement Products Ltdv. State of A.P., (1972) 30 STC 26; State of Tamil Nadu v. Binny Ltd. Madras, fl9SO] Suppl. SCC 686; Royal Talkies Hyerabad v. Employees State Insurance Corporation, [1978) 4 SCC 204; State of Tamil Nadu v. Thirumagel Mills Ltd., (1972) 2
Excerpt shown. Read the full judgment & AI analysis in Lexace.