JUDGMENT

Kirpal. J.-In these appeals by special leave what arises for consideration is whether the respondent is liable to pay sales tax and to be registered as a dealer under the relevant provisions of the Orissa Sales Tax Act. 1947 (hereinafter referred to as the said Act ).

2. The respondent s main business is of running of buses and providing transport facilities to the travelling public. Along with these services the respondent has been disposing of unserviceable, old, obsolete and unutilised parts from its stores. These parts used to be disposed of at yearly intervals. The respondent did not get itself registered as a dealer under the said Act. According to it, no business was being carried on in respect of which any sales tax could have been levied.

3. The Sales Tax Officer considered that the respondent was liable to pay tax. He accordingly made an order of assessment under Section 12(5) of the said Act seeking to tax the respondent s turn-over on the sale of unserviceable old parts, obsolete parts, spare parts, sale of fuel, oil and supply of material utilised in body building to the State Transport service. The Assessing Authority also levied penalty inasmuch as the respondent had failed to get itself registered under the Act.

4. The respondent filed an appeal against the aforesaid decision before the Assistant Commissioner, Sales Tax, but was not successful. Second appeal was then preferred to the Additional Sales Tax Tribunal, Cuttack. The Tribunal accepted the contention of the respondent and came to the conclusion that the respondent could not be regarded as a dealer within the scope of the said Act for the purpose of levying tax.

5. On an application being filed the Tribunal referred the following three questions of law to the High Court :

"(a) Whether on the facts and in the circumstances of the case, the Member, Add1. Sales Tax Tribunal, was legally correct in holding that in respect of the transactions in spare parts and sale of fuel, oil etc. at cost the assessee is not a dealer as per Section 2 (c) of the Orissa Sales Tax Act, 1947?

(b) Whether on the facts and in the circumstances of the case, the Member, Add1. Sales Tax Tribunal is correct to hold that purchases of new spare parts and accessories of such vehicles as Ford, Chevrolet, Despot, Dodge, etc. were not made with an intention to carry on business of selling the same ?

(c) Whether on the facts and in the circumstances of the case, the Member, Add1. Sales Tax Tribunal, is legally correct to hold that the assessee is not a dealer as per Section 2 (c) of the Orissa Sales Tax Act, 1947 in respect of the sale turnover of unutilised new spare parts ?"

6. The High Court vide its judgment answered all the aforesaid questions in favour of the respondent and held that it had not carried on any business as a dealer and, therefore, was not liable to payment of sales tax.

7. On behalf of the appellant it is contended that though the main business of the respondent was of carrying passengers but the sale of spare parts and other items must be regarded as being incidental to that business and, therefore, the turn-over in respect of the said sales was liable to tax.

8. Mr. P.N. Misra, learned counsel for the respondent, however, submitted that respondent was not in the business of selling goods and, therefore, such sales could not form part of its taxable turn-over and the respondent was not obliged to register itself as a dealer under the said Act. Our attention was drawn to a few decisions in an effort to show that the respondent could not be regarded as carrying on business of selling the spare parts etc. The first case which was relied upon was that of State of Gujarat v. Raipur Manufacturing Co. Ltd.1. In that the company was carrying on the business of manufacturing cotton taxtiles, sale of old discarded goods, coal, by-products and subsidiary products. In determining with regard to such sales the company could be considered as carrying on business, this Court held t