The judgment of the court was delivered by

MADHAVA REDDY, J. - The Andhra Pradesh State Road Transport Corporation was provisionally assessed to sales tax on a taxable turnover of Rs. 4,85,321 in respect of the sale of scrapped vehicles and other scrap effected during the period 1st April, 1966, to 30th September, 1966. The Corporation contends that these transactions could not be deemed to be business of the Corporation so as to make it liable to be assessed to tax on the value realised by such sale.

The Andhra Pradesh State Road Transport Corporation is constituted under the Road Transport Corporation Act, 1950. The object of this Corporation is to provide or secure or promote the provision of an efficient, adequate, economical and properly co-ordinated system of road transport service in the State. It is not a trading Corporation. Ever since it was constituted in 1958 it has been operating bus services on various routes in the State. In the course of its activity, scrapped vehicles, old tyres, old containers and other unserviceable material were left with the Corporation which it has been disposing of periodically by public auction or by inviting tenders. The proceeds of the sale of this material is sought to be included in the taxable turnover of the Corporation for the purpose of assessing it to sales tax. The decision of this writ petition depends upon the view we take as to the nature of the activity of the Corporation in disposing of the scrap material and precisely whether such activity could be termed its business. "Business" is defined in section 2(bbb) as follows :

"2. (bbb) '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 or concern is carried on or undertaken with a motive to make gain or profit and whether or not any gain or profit accrues therefrom; and

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

In view of the terms of its incorporation the Andhra Pradesh State Road Transport Corporation is not authorised to carry on any activity except that of providing or securing or promoting the provision of an efficient, adequate, economical and properly co-ordinated system of road transport service in the State. It is not one of its objects to carry on the business of purchase or sale of any scrapped vehicles or other types of scrap. In State of Madras v. K.C.P. Ltd. ([1969] 23 S.T.C. 173 (S.C.) A.I.R. 1969 S.C. 348), the Supreme Court dealt with the case of a company carrying on a business of manufacture and sale of machinery and part of machinery and accessories for manufacturing which the company maintained a foundry and purchased two arc furnaces with a view to utilise the same in its foundry but later found it unsuitable for the purpose and disposed of the same at a profit and the assessing authorities sought to include the amount realised by such sale in the turnover of the company. It was held that where a person in the course of carrying on the business was required to dispose of what may be called his fixed assets or his discarded goods acquired in the course of business an inference that he desired to carry on the business of selling his fixed assets or his discarded goods would not ordinarily arise. The arc furnaces were either fixed assets or discarded goods which had been found to be unserviceable or unsuitable. The assessee could, therefore, hardly be said to be a dealer within the definition given in section 2(b) of the Central Act in relation to their sale and the sale proceeds of the arc furnaces could not be included in the turnover of the assessee. In State of Gujarat v. Raipur Manufacturing Co. Ltd. ([1967] 19 S.T.C. 1 (S.C.)) dealing with a case arising under the Bombay Sales Tax Act, 1953, it was held that in the turnover of a person carrying on the business of selling o