Dipak Kumar Sen, J. - (1.) The facts found and/or admitted in this reference are, inter alia, as follows: Messrs. Kesoram Industries and Cotton Mills Ltd., the respondent herein, filed its return for sales tax under Section 11(1) of the Bengal Finance (Sales Tax) Act, 1941 (hereinafter referred to as the said Act), for the four quarters ending on 31st March, 1964. In computing the gross turnover, it was noticed that amounts realised from sales in the respondent's canteen aggregating Rs. 1,67,946.35 as also the proceeds of casual sales of block and discarded goods had not been included in the gross turnover. The respondent claimed that in law the said amounts did not form part of the taxable turnover. The Commercial Tax Officer rejected such contentions, included the said amounts in the turnover and assessed sales tax accordingly.
(2.) Being aggrieved thereby, the respondent preferred an appeal to the Assistant Commissioner of Commercial Taxes. Following the judgment of the Supreme Court in Deputy Commercial Tax Officer, Saidapet, Madras v. Enfield India Ltd. Cooperative Canteen Ltd. [1968] 21 S.T.C. 317 (S.C.) the Assistant Commissioner held that the proceeds of the canteen sales, except that of sale of cooked food should be included in the gross turnover. As to casual sales of block and discarded goods, the Assistant Commissioner held that, by reason of the volume, frequency, continuity and regularity of such transaction, they could not be held to be sporadic and came within the definition of "business" as given in the said Act. In respect of both the items, the order of the Commercial Tax Officer was confirmed.
(3.) The respondent went up in revision from the above order to the West Bengal Commercial Tax Tribunal. The Member of the Tribunal accepted the contentions of the respondent and, following Fort Gloster Industries Ltd. v. Member, Board of Revenue, West Bengal [1970] 26 S.T.C. 141 held that where the dealer was obliged to run a canteen under the Factories Act, it was a welfare activity and not a business within the meaning of the statute. The Member also noted that the extended definition of the expression "business" in Section 2(1a) of the said Act, which was introduced by an amendment with retrospective operation, under which all transactions incidental or ancillary to any trade, commerce or manufacture or concern within the expression "business" were also included therein, has been struck down by this Court as ultra vires in Shew Bhagwan Goenka v. Commercial Tax Officer [1973] 32 S.T.C. 368. Accordingly, in respect of sales of discarded and rejected machinery, etc., the Member held that the respondent could not be considered to be running a business in terms of its memorandum.;