JUDGMENT

BHAGWATI, J. :—The only question which arises for consideration in this Appeal by certificate is whether sales of provisions effected by the assessee in a workmens store maintained by it are assessable to tax under the Tamil Nadu General Sales Tax Act, 1959. The assessee carries on business of manufacture and sale of textiles in a factory situate in the State of Tamil Nadu. It is one of the leading manufacturers of textiles in the country. It is running a store in the premises of the factory where workmen can buy provisions. In the course of assessment of the assessee to sales tax for the assessment year 1967-68 under the Tamil Nadu General Sales Tax Act, 1959 the question arose whether the sales effected by the assessee in the store were taxable. The assessee contended that in respect of the sales effected by it in the store it was not carrying on a business within the meaning of Section 2 (d) of the Act because there was no profit motive in running the store and this activity was being carried on the it only for the purpose of providing a facility to workmen. This contention was negatived by the Sales Tax authorities and they brought the sales of provisions in the store to tax. The assessee carried the matter in Appeal to the Tribunal where the assessee succeeded and this led to the filing of a revision application by the State before the High Court. The High Court by a brief order dismissed the revision application and following its earlier decision in Deputy Commr. of Commercial Taxes. v Thirumagal Mills Ltd., (1967) 20 STC 287 (Mad) held that the sales in question were not taxable. The State thereupon preferred the present appeal after obtaining the necessary certificate from the High Court.

2. Now, it may be pointed out a the outset that the decision in the Thirumagal Mills case (supra) on which the High Court relied for deciding the present question in favour of the assessee, has been subsequently overruled by this Court in the State of Tamil Nadu v. Burma Shell Co. Ltd., 31 STC 426. The view taken by the High Court in Thirumagal Mills case (supra) was that sales effected in a fair price shop maintained by the assessee were not taxable even after the amendment made in the Tamil Nadu General Sales Tax Act, 1959, with effect from 1st September, 1964, because the activity carried on in the fair price shop was not of a commercial nature and did not partake of the character of business. This view did not find favour with the Court in Burma Shell case and in the judgment delivered in that case Jaganmohan Reddy, J., speaking on behalf of the Court, pointed out that the view taken in Thirumagal Mills case did not take into account the word "such" in clause (ii) of Section 2 (d) of the Act and the Madras High Court was in error in holding that in order to come within clause (ii) of Section 2 (d), it was necessary to show that the transaction had the characteristics of business. Section 2 (d) as it stood after its amendment from 1st September, 1964, defined business in the following terms :

"Section 2 (d). "business" includes (i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and

(ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern;

3. This Court observed in the Burms Shell case (AIR 1973 SC 1045) (supra) that for the purpose of attracting the applicability of clause (ii) of Sec. 2 (d), it was not necessary that the transaction in question must partake of the characteristics of business, but it was sufficient if it was "in connection with or incidental or ancillary to such trade, commerce, manufacture, adventure or concern". The word "such" in clause (ii) was in the op