COMMISSIONER OF SALES TAX, GUJARAT STATE, AHMEDABAD Vs. K.B. MEHTA & COMPANY, AHMEDABAD

JUDGEMENT

(1.) AN interesting question which arises to be considered in this reference and other references, which are on board, is whether a person, who keeps a works contract and makes purchases for the execution of that contract, can be said to be carrying on a 'business of buying goods' within the meaning of the statutory definition of the word 'dealer' as found in section 2(11) of the Bombay Sales Tax Act, 1959 (which is hereinafter referred to as 'the Act').

(2.) SIMILAR questions had arisen in several cases before the Tribunal with the result that the Tribunal has made 9 references on this question to this court. The present case being the leading case in which the Tribunal has recorded an exhaustive judgment, we have taken up this case first for hearing. We have however allowed the Advocates of the other assessees in other similar references to intervene and to argue the matter on behalf of their clients on this question.

(3.) THE opponent is a partnership firm and is admittedly doing business as a building contractor. It is registered under the Act. For the purpose of its business, the opponent -firm purchases building materials like sand, bricks etc. but so far as this reference is concerned, we are not called upon to consider the purchases made by the opponent -assessee of such building materials. It is, however, found from the record of the case that on 9th November, 1964, the opponent -assessee purchased three trucks from M/s. Rashmi Transport Co., Ahmedabad, for the amount of Rs. 1,00,000. It transpires from the evidence that M/s. Rashmi Transport Co., Ahmedabad, are also registered dealers under the Act. The assessment proceedings, out of which this reference arises, are for the period from 1st April, 1964, to 31st March, 1965. During the course of this assessment, the concerned Sales Tax Officer proposed to levy a purchase tax under section 13 of the Act on the amount of Rs. 1,00,000, for which the above -referred three trucks were purchased by the assessee. The assessee, however, contended that it is not liable to pay the said purchase tax because the trucks in question were not purchased by it in the course of its business and also because they were purchased from registered dealers. Here, it should be noted that according to the provisions of section 13 of the Act, purchase tax is not leviable on the articles, which are purchased from registered dealers.