(1.) THIS order will also govern the disposal of Miscellaneous Civil Cases Nos. 97 to 103, all of 1967.
(2.) THESE eight Miscellaneous Civil Cases are all references under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958, (hereinafter called the Act), and arise out of proceedings initiated against the Madhya Pradesh Electricity Board, jabal-pur, for assessment to sales tax and purchase tax for the periods from 1957-58 to 1964-65. The common questions in these references, which have been referred to this Court for decision by the Sales Tax Tribunal (Board of Revenue), are :--
"1 On the facts and circumstances of the case whether or not the madhya Pra-desh Electricity Board is a dealer within the meaning of section 2 (c) of the C. P. and Berar Sales Tax Act, and Section 2 (d) of the madhya Pradesh General Sales Tax Act, 1958, in respect of its activity of generation, distribution, sale and supply of electrical energy? 2. On the facts and circumstances of the case, whether or not the turnover re- presenting the sale of coal-ash is liable to be assessed to sales tax? 3. On the facts and circumstances of the case, whether or not steam is saleable goods and if they are saleable goods is the turnover representing the supply thereof liable to be assessed to sales tax in the hands of the assessee? 4. On the facts and circumstances of the case, whether or not the inclusion of the turnover arising out of the sale of specification and tender forms in the taxable turnover in the different periods was legal and proper? 5. On the facts and circumstances of the case, whether or not purchase of taxable goods from unregistered dealers for use in activities not directly concerned with the main business activity of the assessee namely generating, distributing and supplying of electricity is liable for purchase tax?"
(3.) THE Material facts are that the assessee the Madhya Pradesh Electricity Board, is a body constituted under Section 5 of the Electricity (Supply) Act, 1948. It is charged under Section 18 of that Act with the general duty of promoting, the coordinated development of the generation, supply and distribution of electricity within the State in the most efficient and economical manner. In the assessment years the assessee-Board sold, supplied and distributed electricity to various consumers. It also sold coal-ash, a waste product: and supplied steam to Nepa mills of Burhanpur. The assessee also supplied on payment specification and tender forms to persons intending to give tenders for the various works undertaken by the Board. In the assessment years, the assessee "purchased Gitti, murram, sand etc, from unregistered dealers and consumed them in the manufacture of other goods. " the assessment for the period from. 1st April 1957 to 31st March 1959 is governed by the C. P. and Berar Sales Tax Act, 1947; the assessment for the remaining period is governed by the M. P. General Sales Tax Act, 1958. No sales tax is payable in respect of sale of electrical energy under Section 6 of the 1947 act, read with item No. 29 of Schedule II to that Act. So also, under the Act of 1958 sale of electrical energy is exempt from sales tax under Section 10, read with item No. 13 of the Schedule to the Act. The turnover of the sale of electrical energy is, however, taken into account for determining the gross turnover. The assistant Commissioner of Sales Tax, Jabal-pur, assessed the Board to sales tax on its turnover of sale of coal-ash and tender and specification forms, and the supply of steam to Nepa Mills. He also imposed on the Board purchase-tax on gitti, Murram, sand etc. , purchased from unregistered dealers and consumed in the manufacture of other goods. The assessee was allowed deduction for the sales of tax-free goods. This assessment was upheld in appeal by the Deputy commissioner of Sales Tax, Jabal-pur. In second appeal, which the assessee then preferred, the Sales Tax Tribunal took the view that the assessee is not a "dealer" within the meaning of the terms as defined in the Acts of 1947 and 1958 inasmuch as it is not engaged in the business of selling and supplying electricity with a view to earn a profit but only with a view to promote the co-ordinate development, in the most efficient and economical manner, of the general supply and distribution of electricity. The tribunal further held that the assessee used low-grade coal in thermal generation and the waste coal-ash product was not fit for any purpose and that the assessee did not produce coal-ash for the purpose of sale; and that for this reason, and also for the reason that the assessee was not a dealer, the sales of coal-ash were not taxable. In regard to the supply of steam to Nepa Mills, the Tribunal, on examining the terms of the arrangement under which the assessee supplied steam to Nepa Mills, came to the conclusion that the supply of steam was an isolated transaction, and that this activity of the assessee-Board was undertaken on "no profit no loss" basis. The Tribunal was also inclined to hold that steam was not "saleable" goods as it was not any article which could be brought to the market and could be bought and sold there. It was, therefore, held by the Tribunal that the supply of steam was not liable to be assessed to sales tax. The Tribunal further held that the specification and tender forms were not marketable goods and there was no profit element in the sale of those forms; and that, therefore, no sales tax could be levied on the sale of those forms. On the question of the liability of the Board to purchase-tax, the Tribunal held that as the assessee was not a "dealer" in respect of the sale and supply of electricity, no purchase-tax could be imposed on it on goods purchased by it and consumed "in furtherance of and in aid of the business activity of generating, supplying and distributing electricity".;