The definition of 'business' in clause (5A) of section 2 of the Bombay Sales Tax Act, 1959, did not nullify the decision of the Supreme Court in State of Gujarat v. Raipur Manufacturing Co. Ltd. [1967] 19 STC 1, which held that a person carrying on the business of buying or selling certain goods cannot be regarded as a dealer in any and every goods sold by him without a finding that either he carries on the business of buying or selling such goods or that the sales of such goods are connected with or incidental or ancillary to his 'business of buying or selling goods' or that they fall in any of the inclusive clauses of the definition of 'business'.

The judgment of the Court was delivered by

DR. B. P. SARAF, J. - By this reference under section 61(1) of the Bombay Sales Tax Act, 1959, the Maharashtra Sales Tax Tribunal, Bombay, has referred the following question of law to this Court for opinion at the instance of the assessee :

"Whether, on the facts and circumstances of the case and on a true and proper interpretation of section 2(5A) of the Bombay Sales Tax Act, 1959, the Tribunal was justified in confirming the levy of tax on the sales of three used motor cars, which were not purchased by the applicants from registered dealers in Maharashtra State ?"

2. The assessee is a manufacturer of chemicals and other products and is registered as a dealer under the Bombay Sales Tax Act, 1959 ("the Act"). During the calendar year 1980, the assessee had effected the following sales of four used motor cars :

------------------------------------------------------------------------

Month Car No. Description Amount

------------------------------------------------------------------------

March, 1980 MMD 4855 Ford Rs. 25,000

August, 1980 MMF 9814 Ambassador Rs. 40,000

December, 1980 MSF 3561 Ford Rs. 45,000

December, 1980 MRF 1367 Peygot Rs. 17,000

------------

Rs. 1,27,000

------------

While assessing the assessee under the Bombay Sales Tax Act, the Sales Tax Officer held the assessee liable to pay tax on the above sales of used motor cars on the ground that these were made in the course of business of the assessee and accordingly levied tax on the amounts received on the sales thereof at the rates applicable at the material time, which was 12 paise in a rupee. This was done by him in view of the definition of the word "business" in section 2(5A) of the Act inserted with effect from January 15, 1975, by the Maharashtra Act 62 of 1974 by which business was defined to include not only trade, commerce or manufacture or any adventure in the nature of trade, but also any transaction connected with or incidental or ancillary thereto. Aggrieved by the above order of the Sales Tax Officer, the assessee appealed to the Assistant Commissioner of Sales Tax on the ground that he was not a dealer in respect of sales of cars or used cars as he neither carried on the business of buying or selling of cars nor buying or selling cars was a transaction connected with or incidental or ancillary to his business. The Assistant Commissioner did not accept the above contention of the assessee and dismissed the appeals. The assessee went in further appeal to the Maharashtra Sales Tax Tribunal ("the Tribunal"). It was contended before the Tribunal on behalf of the assessee that the authorities below erred in levying sales tax on the sales of used cars inasmuch as he was a manufacturer of chemicals, etc., and was engaged in selling and supplying the same and his business did not comprise of buying or selling cars used or unused. It was submitted before the Tribunal that even after the insertion of the definition of the word "business" in clause (5A) of section 2, sales of capital goods could not be subjected to sales tax under the Act. The case of the assessee before the Tribunal was that the cars had been purchased by it for use of its directors and employees and not with the intention to resell the same. The sale of these cars, when they became old and unserviceable, as used cars was, therefor, neither in the course of the business of the assessee nor in connection with or incidental to or ancillary to the business carried on by the assessee. According to the assessee, these sales were casual sales of unserviceable capital goods, which could not be subject-matter of levy of sales tax under the Act. The Tribunal, however