- (1.) THIS appeal by special leave is directed against the judgment of the High Court of Madras allowing a revision petition filed by the respondent in a case arising out of an assessment under the Tamil Nadu General Sales Tax Act, 1959.
(2.) THE appellant carries on the business of printing and publishing newspapers. It appears that some copies of the newspapers remain unsold, and these surplus copies are disposed of in the market as waste paper. The sales of the old newspapers are made by weight. In assessment proceedings for the assessment year 1965-66 the Deputy Commercial Tax Officer assessed the turnover of unsold newspapers to tax under the Tamil Nadu General Sales Tax Act, 1959. In appeal before the Appellate Assistant Commissioner of Commercial Taxes, the appellant-dealer claimed that it was not carrying on the business of selling old newspapers and, therefore, it could not be assessed to tax on such turnover. The Appellate Assistant Commissioner rejected the contention and held that the sales were taxable as the transactions were ancillary to the business of publishing newspapers. But a further appeal before the Sales Tax Appellate Tribunal, Madras was allowed in the view that the unsold newspapers had been sold as waste paper and that what was sold was not a product of the newspaper business and further that the appellant could not be said to be carrying on any business in the sale of such waste paper. The State of Tamil Nadu applied in revision to the High Court, and the High Court allowed the revision petition and setting aside the order of the Sales Tax Appellate Tribunal it restored the assessment order made by the Deputy Commercial Tax Officer. The High Court held on the material before it that in selling unsold newspapers as waste paper the appellant could be said to be carrying on a business. It referred in this connection to the application for registration made by the appellant under the Tamil Nadu General Sales Tax Act in which the appellant had clearly stated that it was carrying on business in old and unsold newspapers. It observed that the transactions of sale could be regarded as an ancillary business connected with the main business of printing and publishing newspapers. In this appeal learned counsel for the appellant contends that when the surplus copies of the newspapers were sold they possessed the character of newspapers and were, therefore, exempt from sales tax. It seems to us clear that when newspapers are sold to the reading public they are sold as a medium containing information regarded as news. They are purchased by members of the public to acquaint themselves with the current news. Information is news when it is fresh and new. With the lapse of time it ceases to be news. So when newspapers become old, they carry information which is no longer news, and therefore they lose their character as newspapers. When they are disposed of as waste paper, their sale cannot be regarded as the sale of newspapers. They are not sold for the purpose of reading the news printed in them. It will be noted that the surplus copies are sold by weight and not per copy. What is exempt from sales tax is the turnover of newspapers and not the turnover of old newspapers or waste paper. It is also clear from the material on the record that the transactions of sale of the surplus copies must be regarded as a business carried on by the appellant. It was an activity which he pursued regularly, and the motive was to earn a profit. It was incidental to the business carried on by the appellant of printing and publishing newspapers. In the course of carrying on the business of printing and publishing newspapers, it is inevitable that a number of copies should remain surplus and that they should, therefore, be sold as waste paper. The business of selling the surplus copies as waste paper attracted sales tax, having regard to the terms of clause (d) of section 2 of the Act, which defines the expression "business", as it stood at the relevant time.
(3.) IN our opinion, the High Court is plainly right in maintaining the sales tax assessment on the turnover of the surplus copies of newspapers sold as waste paper. Learned counsel for the appellant relies on the decisions of this Court in State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 STC 1 and State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. [1973] 31 STC 426. Having regard to the state of the laws at the relevant time, these decisions do not, in our opinion, assist the appellant. In the result, the appeal fails and is dismissed but with out any order as to costs. Appeal dismissed. .;