Calcutta Dyeing and Bleaching Works vs The State of Madras

Ramakrishnan, J.—The assessee purchased camphor sold by the Customs Department when they auctioned confiscated goods. He

subsequently sold the camphor. Camphor is assessable at the point of first sale by dealer. The assessee contended that the Customs Authority was

the first dealer. But the Department repelled that contention and holding that the Customs Authority''s sales were not the first sales, assessed the

assessee as the first dealer in camphor. This order was confirmed by the Sales Tax Appellate Tribunal. The assessee now seeks revision against

the above order.

The learned counsel appearing for the petitioner argued that these sales effected by the Customs Department are regular and periodic. He also

referred to a recent decision of this Court reported in Fiaz Ahmed & Co. v. State of Madras, [1964] 15 S.T.C. 2001 where this Court observed

that ""something has to be said for the view that the absence of profit motive does not mean that a business is not being carried on"". Nevertheless

stress was laid upon the activity in which the dealer was concerned being one of a business nature, so as to attract to him the technical definition of

dealer"" in Section 2(g) of the Madras General Sales Tax Act, 1959. The definition of dealer again hinges on the definition of ""business"" which,

according to Section 2(d) of the Act, includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce

or manufacture whether or not any profit accrues from the said trade, commerce, manufacture or concern. It cannot be held that the Customs

Authority which comes into possession of confiscated goods from time to time and periodically sells them in auction is engaged in trade, commerce

or manufacture, or adventure in the nature of trade. We have got similar instances, say of a Magistrate''s Court where periodically unclaimed

property concerned in offences, accumulate and whose sales are advertised and held. The properties which accumulate in the possession of the

Customs Department usually consist of a random collection of goods spotted at the Customs barrier, and detained, and subsequently not delivered

to the importer for one reason or other. The Customs Department cannot be considered as being engaged in business as defined in the Act when

sales of such goods after their confiscation are held. Even assuming for the sake of argument that a profit motive is not an essential feature of the

transaction, and that there is some kind of regularity in the sales effected by the Customs Department, still in the absence of anything to indicate the

essential requirement of an activity in the nature of trade, commerce or manufacture or adventure or concern in the nature of trade, we are unable

to see how the decision of the lower Tribunal can be held to be incorrect. This revision case is dismissed.