A casual sale of second-hand goods is not liable to be taxed under the Sales Tax Act. Plain glass sheets used for window panes and door panes can be regarded as 'glass-ware' for the purpose of item 14 of the original Schedule I to the Act.

MUDHOLKAR, J. - This is a reference by the President, Board of Revenue, Madhya Pradesh, under section 23(1) of the C.P. and Berar Sales Tax Act, 1947. The question which are referred to this Court, at the instance of the Commissioner of Sales Tax, are as follows :-

"(1) A dealer effects casual sales of certain goods, the like of which find no mention either in his application for registration or in the registration certificate granted to him, among goods ordinarily purchased by him for resale. They (goods sold) are used or second-hand goods forming his private property for which he has no further use. Also they have no connection with any of the businesses for which he is registered or is liable to be registered. Are these sales liable to be taxed under the Act ?

(2) Can plain glass sheets, such as are used for window panes and door panes, be regarded as 'glass-ware' for the purpose of item 14 of the original Schedule I to the Act ?"

2. A preliminary objection is taken to the reference on behalf of the non-applicant. It is to the effect that the reference ought to have been made not by a single Member of the Board of Revenue, as here, but by a Bench of two Members as provided for in Rule 8 framed under section 7(1) if the Act and published in the C.P. and Berar Gazette of 10th May, 1949 at page 485. That rule runs thus :-

"The following matters shall be placed before and heard and decided by a Bench of two or more Members as directed by the President :-

(i) Any matter directly affecting the revenues of the Province in which the Advocate-General or Government Advocate appears on behalf of the Provincial Government.

(ii) Rotation cases under the Berar Patels and Patwaris Law, 1900, and the rules thereunder."

The learned counsel who appears for the applicant states that this rule has been amended but concedes that the amendment was made after the case was referred to this Court by the Board of Revenue. For rule 8 to be attracted to this case, it must be shown that the matter which arose before the Board of Revenue directly affected the revenue of the State. The matter which was directly before the Board was only whether a reference should be made or should not be made. It could be said that such a matter directly affects the revenue of the State, though it may indirectly affect it. There is no rule which requires a matter which indirectly affects the revenue of the State to be placed for hearing and decision by a Bench of two or more Members. I, therefore, overrule the preliminary objection.

3. Now as regards merits. I have already set out the first question which is referred to this Court. The Board of Revenue in its appellate order has held that a casual sale of the kind mentioned in the question is not liable to be taxed under the Sales Tax Act. In my opinion the view taken by the Board of Revenue is correct.

4. A sales tax is payable under the Act only by a dealer. A dealer is defined as follows in section 2(c) of the Act :-

"'dealer' means any person who, whether as principal or agent, carries on in the Central Provinces and Berar the business of selling or supplying goods, whether for commission, remuneration or otherwise and includes a firm, a partnership and a Hindu undivided family and includes also a society, club or association selling or supplying goods to its members."

Thus, a person can be regarded as a dealer only in relation to the goods which it is his business to sell or supply. So, where a person, though a dealer in respect of certain commodities effects a sale of a commodity which it is not his business to sell, he is not liable to be taxed under the Act. It is not correct to say that merely because a commodity falls within Schedule I of the Act any person who effects a sale thereof is liable to pay tax, nor is it correct to say that because a person is a dealer within the meaning of the Act he is bound to pay tax with regard to every sale of property which falls under Schedule I do the Act. It must be e