The Judgment of the Court was delivered by

KANIA, J. - This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the said Act"). The question referred to us for our determination is as follows :

"Whether, on the facts and in the circumstances of the case and on a proper interpretation of section 13 of the Bombay Sales Tax Act, 1959, the Tribunal was correct in law in holding in its judgment in Appeal No. 134 of 1968 that no purchase tax was payable under the said section on the purchase of the ship 'Jalapratap' by the appellants under the instrument dated 10th November, 1965, and which ship was dismantled ?"

The facts giving rise to this reference are as follows : The respondents are a registered dealer under the said Act and deal in iron and steel, iron scrap, electric motors and machinery. They also purchase unserviceable ships for scrapping and dismantling. Under an instrument of sale dated 10th November, 1965, the respondents purchased a ship named "Jalapratap" along with its boats and appurtenances from the Scindia Steam Navigation Co. Ltd. This purchase was made by the respondents for the purpose of breaking and scrapping