PETITIONER:
STATE OF TAMIL NADU AND ANOTHER
Vs.
RESPONDENT:
BOARD OF TRUSTEE OF THE PORT OF MADRAS
DATE OF JUDGMENT: 26/03/1999
BENCH:
M. JAGANNADHA RAO, & S.N. PHUKAN.
JUDGMENT
M.JAGANNADHA RAO,J.
Leave granted.
This appeal is preferred by the State of Tamil
Nadu and the Commercial Tax Officer, Harbour- I,
Assessment Circle, Chennai against the Judgment of
the High Court of Madras in Writ Appeal No.1015 of
1994 dated 10.12.1996. By that Judgment, the
Division Bench allowed the appeal and set aside the
Judgment passed by the learned Single Judge in Writ
Petition No.5509 of 1994 dated 30th March, 1994.
The learned single Judge had dismissed the writ
petition No.5509 of 1994 filed by the first
respondent, the Board of Trustees of the Port Trust
of Madras (hereinafter called the ‘Port Trust’) and
by the Judgment under appeal, the writ petitions
stood allowed and the notices issued by the Second
appellant, the Commercial Tax Officer on 1.9.1993
and 8.2.1994 stood quashed.
The facts are as follows:
The Madras Port Trust is now a major Port
Trust governed by the provisions of the Major Port
Trusts Act, 1963 (earlier it was governed by an Act
of 1905). It provides services of landing,
shipping or trans-shipping, receiving, shifting,
transporting, storing or delivery of goods brought
into the premises of the Port Trust. Goods are
brought into the Port Trust and delivered to the
importee/consignee or their cleaning Agents etc.
Goods are also exported through the Port Trust by
means of its services. In the case of uncleared or
abandoned goods, the Port Trust brings them for
sale in public auction after the approval of the
customs authorities. Before 1959, the Sales Tax
Authorities in Madras sought to assess the Port
Trust to sales tax under the Madras General Sales
Tax Act (Act 9 of 1939) in respect of charges
collected for water supplied by the Port Trust to
ships. At that time, the Port Trust was governed
by the Madras Port Trust Act (Act 2 of 1905). A
Division Bench of the High Court of Madras in
Trustees of the Port of Madras vs. State of Madras
[1960 (11) STC 224](Mad) held by Judgment dated
27.11.1959 that the Port Trust was not constituted
for the purposes of "carrying on any business" of
buying and selling with a view to make profit and
that while supplying water to the ships that called
at the Port, it was only discharging a statutory
duty imposed upon it by the statute and was not a
"dealer", within the meaning of ‘dealer’ in Section
2(b) of the Madras General Sales Tax Act, 1939. At
that time Section 2(b) which defined the word
"dealer" stated that a dealer would be any person
who carried on the business of buying or selling
goods. The definition did not say that it was not
relevant whether the said person was carrying on
business with or without profit motive. In other
words, profit motive was treated, at that time, as
an essential element of business. The High Court,
therefore, held that inasmuch as the Port Trust was
performing certain statutory functions and
rendering duties without any intention to make
profit, it was not a ‘dealer’ within the definition
of the said expression.
The above said statute of 1939 was replaced by
the Tamil Nadu General Sales Tax Act, 1959. It
contained a definition of "business" in Section
2(d) and a definition of "dealer" in Section 2(g).
The definitions were amended from time to time.
Section 2(d) which defined "business" did not
initially state that the motive to gain or profit
was not relevant. But the said sub-clause 2(d) was
substituted by a new clause by the Madras Act 15 of
1964 which included within the said definition of
"business", the activity of carrying on business
whether or not such business was carried on with a
motive to make gain or profit. After the said
amendment of 1964 the matter in regard to the
Madras Port Trust again went before the Madras High
Court in State of Madras vs. Trustees of Port of
Madras [(1974) 34 STC 135] (Mad). The dispute in
that case related to the sale of unclaimed and
unserviceable goods by the Madras Port Trust
through auctioneers. The question raised was
whether the Port Trust was a department of the
Central Government and whether the Port Trust was a
‘dealer’ and its activity of selling the unclaimed
and unserviceable goods could be subjected to sales
tax. It was held by a Division Bench of the High
Court of Madras in the above cited case in State of
Madras vs. Trustees of Port of Madras [(1974) 34
STC 135], that even though the sales in question
related to the assessment years 1964-65 and 1965-66
and were effected after the amendment of the
definition "business" by Madras Act 15 of 1964,
still the above said transactions of sale were not
liable to sales tax inasmuch as the Port Trust
could not be treated as a ‘dealer’ carrying on the
business of selling, supplying or distributing
goods as a commercial venture in the course of the
exercise of its statutory duties. It was also held
that the Port Trust was a statutory body
constituted by the Madras Port Trust Act, 1905 and
though it was subject to certain control by the
Central Government, it could not be treated as a
department of Central Government so as to come
within Explanation 2 read with Section 2(g) of the
Act of 1959 nor was the Port Trust liable as a
local authority within the meaning of ‘dealer’ in
section 2(g)(i) as it was not established that it
was carrying on business of buying and selling etc.
Subsequently, sub-clause (iii) of Section 2(g)
of the Tamil Nadu General Sales Tax Act, 1959 was
amended by Tamil Nadu Act 31 of 1992. Section
2(g)(iii) after amendment included within the
definition of ‘dealer’ a factor, broker or
commercial agent or Arhati, a del Credere Agent or
a commercial or any other mercantile agent by
whatever name called, and whether of the same
description as stated above or not, who carried on
the business of buying, selling, supplying or
distributing goods on behalf of any principal or
through whom the goods were bought, sold, supplied
or distributed. On the assumption that after the
above said amendment by Tamil Nadu Act 31 of 1992
in the definition of "dealer", the Judgment of the
Madras High Court in State of Madras vs. Trustees
of Port of Madras [1974 (34) STC 135] (Mad) would
not come in his way, the second appellant namely,
the Commercial Tax Officer issued a notice dated
1.9.1993 calling upon the Port Trust to register
itself as a dealer under the Tamil Nadu General
Sales Tax Act, 1959. The respondent then replied
on 26.10.1993 relying upon the above Judgment of
the Madras High Court rendered in State of Madras
vs. Trustees of Port of Madras [(1974) 34 STC 135]
(Mad) and it contended that the amendment did not
make any difference. Thereupon, the second
appellant gave a further notice dated 8.2.1994
directing the respondent to furnish details of the
auction sales conducted during the year 1993-94
upto 1.4.1993. In the said notice the respondent
was asked "to furnish the details of auction sales
conducted during 1993-94 and the quantum of sales
effected by way of auction commodity-wise, date-
wise" to the second appellant. It was at that
stage that the Port Trust filed Writ Petition
No.5509 of 1994 contending that the Tamil Nadu
General Sales Tax Act, 1959 did not apply to it and
that the notices issued to them were without
jurisdiction. A learned single Judge of the High
Court dismissed the writ petition by Judgment dated
30.3.1994 holding that the definition of ’dealer’
in section 2(g)(iii) as amended in 1991 was wide
enough to cover the case of the respondent and that
the Judgment of the High Court in State of Madras
vs. Trustees of Port of Madras [(1974) 34 STC 135]
(Mad) rendered before the said 1991 amendment was
not applicable. It was also observed that the
proceeding being a show-cause notice, the
respondent could go before the Commercial Tax
Officer and pursue further remedies under the Act.
The Port Trust preferred an appeal to the
Division Bench of the High Court, which on a
consideration of the provisions of the Major Port
Trust Act, 1963 and the amended provisions of Tamil
Nadu General Sales Tax Act, 1959 came to the
conclusion that there was no element of profit or
gain in the duties discharged or in the services
rendered by the Port Trust, the services were
statutory and these services did not come within
the definition of the word "business" in Section
2(d) of the Act and, therefore, the respondent was
not a "dealer" within Section 2(g) of the Act
notwithstanding the amendment to Section 2(g)(iii)
by the Tamil Nadu Act 31 of 1992. The Writ Appeal
was allowed and the notices of the second appellant
were quashed.
Aggrieved by the above said Judgment of the
Division Bench of the High Court in the writ
appeal, the State of Madras and the Commercial Tax
Officer have filed this appeal. The Port Trusts of
Cochin, Kandla, Calcutta have filed Interlocutory
Applications for intervention but inasmuch as the
concerned State Governments which levy sales-tax
under the respective State Laws are not before us,
we have not permitted any arguments by the said
Ports in regard to the leviability of sales tax
under the respective State enactments. We have
merely allowed them to support the submissions of
the Madras Port Trust in the context of the Tamil
Nadu Statute. Their applications are, therefore,
liable to be dismissed.
In this appeal, we have heard elaborate
submissions of the learned senior counsel Shri
A.K.Ganguli for the State of Tamil Nadu and of Sri
T.L.Viswanatha Iyer, learned senior counsel for the
Madras Port Trust. Counsel cited a large number of
rulings in support of their respective contentions.
The notices in the present case refer to the
auctions conducted by the Port Trust during 1993-94
and in the Civil Appeal it is stated in ground No.
(i) (l) and (r) that the Port Trust is liable to
pay sales tax in regard to the auctions of
unclaimed or unservicable goods including scrap.
Therefore, the dispute was in relation to these
items.
Under the Tamil Nadu Sales Tax Act, 1959,
after the amendment by Madras Act 15 of 1964 and
Tamil Nadu Act 31 of 1992, sub clause (g) of
section 2 defines ‘dealer’ and in so far as it is
material for the purpose of this case, reads as
follows:
"S.2(g): "dealer" means any person who
carries on the business of buying, selling,
supplying or distributing goods, directly or
otherwise, whether for cash, or for deferred
payment, or for commission, remuneration or other
valuable consideration, and includes--
(i) a local authority,........ which carries
on such business;
(ii).....................................
(iii)a factor, ........., or an auctioneer, or
any other mercantile agent by whatever name
called,........who carries on the business of
buying, selling, supplying or distributing goods on
behalf of any principal or through whom the goods
are bought, sold, supplied or distributed;
(iv) to (ix).............................
Explanation (1):.........................
Explanation (2):The Central Government or any
State Government which, whether or not in the
course of business, buy, sell, supply or distribute
goods, directly or otherwise, for cash, or for
deferred payment, or for commission, remuneration
or other valuable consideration, shall be deemed to
be a dealer for the purposes of this Act.
Section 2(d) defines ‘business’ as follows:
"S.2(d): "business" includes
(i) any trade, or commerce or manufacture or
any adventure or concern in the nature of trade,
commerce or manufacture, whether or not such trade,
commerce, manufacture, adventure or concern is
carried on with a motive to make gain or profit and
whether or not any profit accrues from such trade,
commerce, manufacture, adventure or concern; and
(ii)any transaction in connection with, or
incidental or ancillary to, such trade, commerce,
manufacture, adventure or concern."
Sub-clause (n) of section 2 defines ‘sale’ as
every transfer of the property in goods (otherwise
than by way of a mortgage, hypothecation, charge or
pledge) by one person to another in the course of
business for cash, deferred payment or other
valuable consideration. The inclusive part of the
definition of ‘sale’ contains sub-clauses (i) to
(vi). There are four Explanations to the section
and Explanation (1-B) deals with transfer of
property involved in the purchase, sale, supply or
distribution of goods through various persons
including an auctioneer.
Section 3 of the Act, in sub-clause (1),
states that every dealer (other than a casual
trader or agent of a non-resident dealer) whose
total turnover for a year exceeds three lakhs of
rupees and every casual trader or agent of a non-
resident dealer, whatever be his turnover for the
year, shall pay tax for each year in accordance
with the provisions of the Act.
As will be clear from the definition of
‘dealer’ in section 2(g) the question is whether
the Port Trust, - treated as a person under section
2(g) or a local authority under section 2(g)(i) or
as an auctioneer under section 2(g)(iii) - is a
‘dealer’ "who carries on the business of buying,
selling etc.". The emphasis here is on "carrying
on business" and not merely buying and selling. In
view of the definition of "business" in section
2(d) after the 1964 Amendment, it does not matter
whether the business is carried on without a motive
to make profit or gain or whether profit has in
fact accrued.
Now the definition of "business" in section
2(d) and in most of the sales tax statutes is an
inclusive definition and includes ‘trade or
business or manufacture etc.’. This itself shows
that the legislature has recognised that the word
‘business’ is wider than the words ‘trade, commerce
or manufacture etc.’. The word ‘business’ though
extensively used is a word of indefinite import.
In taxing statutes, it is normally used in the
sense of an occupation, a profession - which
occupies time, attention and labour of a person,
normally with a profit motive and there must be a
course of dealings, either actually continued or
contemplated to be continued with a profit motive
and not for sport or pleasure[State of A.P. vs.
H.Abdul Bakhi & Bros. (AIR 1965 SC 531)]. Even if
such profit motive is statutorily excluded from the
definition of ‘business’ yet the person could be
doing ‘business’.
The word ‘carrying on business’ requires
something more than merely selling or buying etc.
Whether a person ‘carries on business’ in a
particular commodity must depend upon the volume,
frequency, continuity and regularity of
transactions of purchase and sale in a class of
goods and the transactions must ordinarily be
entered into with a profit motive (Board of Revenue
& Others vs. A.M.Ansari & Others ( 1976 (3) SCC
512). Such profit motive may, however, be
statutorily excluded from the definition of
‘business’ but still the person may be ‘carrying on
business’.
Counsel on both sides cited various rulings
before us some relating to definition of ‘business’
before the profit motive was excluded and some
thereafter. Some rulings related to cases where
the main transaction was ‘business’ with profit
motive while some were sales where it was not the
motive. In some cases the sales were of subsidiary
products. Cases where the main activities were not
‘business’ were also cited. Cases where the
transactions arose out of statutory duties were
also cited and some were in connection with
services rendered. Some were by governments.
These various types of cases cited could appear to
be somewhat overlapping, but in our view, if the
principles on which they are based are kept in
view, it can be seen that there is no such
overlapping.
We would categorize the rulings cited before
us by learned senior counsel on both sides into two
basic and distinctive categories, the first one
where the main activity of the person amounted to
"carrying on business" and the second where it did
not. In the first category where the main activity
was business, there could be sales relating to
certain transactions ‘connected with’, ‘incidental’
or ’ancillary’ to the main business though without
profit motive, and the question would arise as to
whether these sales were liable to sales tax or
not. The second category would be one where the
main activity did not admittedly amount to
"carrying on business". Even so, in regard to
sales which were connected or incidental or
ancillary to such main activity, question would
arise whether such sales were exigible to sales
tax. The contention of the Port Trust before us is
that its case falls under the second category and
not under the first category. The State contends
contra.
So far as the first category of cases are
concerned, we may state that initially most sales
tax statutes did not provide in the definition of
‘business’ that profit motive was irrelevant. Thus
the profit motive remained relevant. Nor did the
statutes include in the definition of ‘business’
sales ‘in connection with’ or ‘ancillary’ or
‘incidental’ to the main business.
In a large number of cases belonging to this
first category the person was held not to be
‘carrying on business’ if he was not doing business
for profit, an element which, not being excluded,
was to be treated as a basic component of
‘business’ and, therefore, implied under various
sales-tax statutes. It was held in these cases
that though trading activities were no doubt
proved, there being no profit motive involved in
the relevant activity, the sales were not liable to
sales tax, and the person could not be held to be
‘carrying on business’. To this line belonged
Director of Supplies and Disposals, Calcutta vs.
Member, Board of Revenue, West Bengal, Calcutta
[AIR 1967 SC 1826 = 20 STC 398] cited for the
respondent Port Trust, which related to disposal of
war equipment taken over from the American forces
in the Second World War. The Directorate of
Disposals which carried on the disposals was merely
disposing of surplus material by way of realisation
of capital and there was no profit motive. On the
same basis, in Government Medical Store Depot,
Gauhati vs. Superintendent of Taxes, Gauhati &
Others [1985 (4) SCC 239], again cited for the
respondent Port Trust, it was held that, as per the
unamended definition of ‘business’, profit-motive
was not excluded and, on the facts found, as there
was no profit-motive established, the transactions
of sales of medicines by the Medical Store Depot to
various departments, did not amount to ‘carrying on
business’ in spite of the volume, frequency,
continuity and regularity of the transactions.
This was followed in Government Medical Store
Depot, Karnal vs. State of Haryana & Others [ 1986
(3) SCC 669]. In State of Punjab vs. Assessing
Authority, Chandigarh [1991 Supp. (1) SCC 153],
the sales were by Canteens run by the Hospitality
Organisation, Punjab. In all these cases, it was
held that sales tax was not leviable because of
absence of profit motive (which was not excluded by
statute) in regard to the main activities. But
these cases are not directly in point inasmuch they
are based on a definition of ’business’ which did
not exclude profit motive and cannot help the
respondent - Port Trust.
Again. before the statutory exclusion of
‘profit motive’ from the definition of ‘business’,
question arose whether certain sales of commodities
other than the goods relating to the main business
could also be included in the turnover. The
definition did not, in the initial stages, include
sales made "in connection with" the main business
activities. The said word is obviously wider than
the word ‘ancillary’ or ‘incidental’. We shall
start with the leading case. In State of Gujarat
vs. Raipur Manufacturing Co. Ltd. [AIR 1967 SC
1066 = 19 STC 1], relied upon for the respondent -
Port Trust, it was held by Shah, J. (as he then
was) that the definition of ‘business’ did not
exclude profit motive nor did it include sales "in
connection with" the main activity. The Textile
Mill’s main activity did indisputably amount to
‘carrying on business’ but in regard to the
incidental sales of ‘unserviceable or discarded’
goods, it was held that these sales were intended
only for reduction of the space and to save
accommodation and were not so integrated with (or
connected with) the main business, even if they
were of considerable volume and frequency. There
was no proof that the Mills intended to carry on
business in unserviceable and discarded goods.
However, in the same case, ‘Kolsi and Waste Caustic
Liquor’ which were sold regularly and continuously
were held to be part of the business being
subsidiary products of the main business of the
Textile Mill and sales of these items were held
liable to sales tax inasmuch as an intention to
trade in these items could be presumed. Likewise
in State of Gujarat vs. Vivekanand Mills [(1967)
19 STC 103 (SC)], cited for the respondent- Port
Trust, the Mills purchased cotton locally believing
that shipment from California would take 6 months
time to arrive but the Californian Cotton arrived
suddenly and therefore the local cotton had to be
sold to avoid blocking up of a large sum of money.
It was held that it could not be inferred that the
Mills intended to carry business in selling cotton.
The sales were not liable to tax. Position was
similar in State of Gujarat vs. Arvind Mills Ltd.
[(1967) 19 STC 12 (SC)] where sales of old
containers such as cans, boxes, discarded stores,
machinery and iron scrap, discarded hessian, oil
and chemicals were held not part of business but
sale of ‘Waste Caustic liquor’ were held liable to
tax. Again in State of Gujarat vs. Ambica Mills
Ltd. [(1967) STC 12 (SC)] the sale of 89 looms, 28
carding engines, 2 lathes etc. were held not
exigible to tax. In Hindustan Steels Ltd. vs.
State of Orissa [AIR 1970 SC 253], the main
activity was production of steel but there were
sales of bricks to contractors at a fixed
percentage over cost price. These sales were held
not part of the main business activity and were
held not liable to sales tax. All these cases
being based on a definition of ’business’ which did
not include connected, ancillary or incidental
sales, cannot help the respondent -Port Trust.
After the amendment to the definition of
‘business’ in 1964 or thereabouts in most sales-tax
statutes, profit motive was statutorily treated as
irrelevant. Further, by including sales made ‘in
connection with’ or ‘incidental’ or ‘ancillary’ to
the main business as part of ‘business’, the scope
for taxation was widened and questions arose again
whether, the incidental sales of certain
commodities could be treated as amounting to
‘carrying on business’.
The words ‘in connection with’ occurring in
the definition of ‘business’ fell for consideration
in State of Tamil Nadu vs. M/s Burmah Shell Oil
Storage and Distributing Co. of India Ltd. &
Another [1973 (3) SCC 511 = 31 STC 426] strongly
relied upon for the appellant - State of Tamil
Nadu. In that case, sales fell into two periods.
The oil company’s sales during 1-4-64 to 31-8-64
and those during 1.9.64 to 31.3.65 were in
question. The amendment which made profit motive
irrelevant and included sales made ‘in connection
with’ main business in the definition of ‘business’
came into force w.e.f. 1.9.64 in Madras State. In
respect of the pre-amendment period, this Court
followed Raipur Manufacturing Co. Case [AIR 1967
SC 1066]. Jaganmohan Reddy, J. held that the sale
of miscellaneous, old and discarded items, could
not be treated as part of the activities of
carrying on business even if the sales were
frequent and their volume was large. It was also
observed that the discarded goods were not
by-products or subsidiary products of or arising in
the course of manufacturing process. Nor could
they be treated as sales ‘in connection with’ the
main business for such a contingency was not part
of the then definition of ‘business’. But in
respect of the period after 1.9.64, it was held
that the addition of the words in section 2(d) (ii)
of transactions "in connection with or incidental
or ancillary to such trade, commerce, manufacture,
adventure or concern" and the exclusion of
‘profit-motive’ made the definition of ‘business’
wider. It was, therefore, held that the scrap that
was sold after 1.9.1964 was "connected with" the
business of the company. The Court distinguished
Raipur Manufacturing Co. Case on this ground. An
argument was advanced for the assessee in that case
that the word ‘such’ in the inclusive part of the
definition of ‘business’ in section 2(d)(ii) viz.
"any transaction in connection with or incidental
or ancillary to, such trade, commerce, manufacture,
etc.", governed the word ‘trade’ etc. and that a
commercial element was intended to be part of the
subsidiary sale transaction. But this contention
was rejected by this Court holding that the word
‘such’ referred to the concept of absence of profit
motive, as per the amended definition of ‘business’
in section 2(d)(i). It was held that the decision
of the Andhra Pradesh High Court in Hyderabad
Asbestos Cement Products Ltd. vs. State of A.P.
[(1972) 30 STC 26] had correctly explained the
position after a similar amendment. Adverting to
that judgment, it was held(p.516):
"In their view (Andhra Pradesh High Court),
under both parts of the definition, profit motive
is now immaterial and the concept of business in
respect of matters falling under section 2(d)(ii)
in the commercial sense put forward and accepted in
the earlier cases must be abandoned. We think the
view adopted by the Andhra Pradesh High Court is in
consonance with our own reading of the section
which we have indicated earlier."
In other words, the "concept of business in
the commercial sense" was, it was held, abandoned.
That would mean that after the amendment, it was
sufficient if these sales were made "in connection
with" the trade and there was no need to prove in
these sales any commercial element. The word
‘such’ in sub-clause (ii) of section 2(d) defining
‘business’ after amendment would mean the absence
of profit motive and it did not matter so far as
these sales were concerned, if there was no profit
motive or commercial element. Such sales were also
to be treated as part of ‘business’ under the
inclusive part of section 2(d)(ii). Thus sales of
scrap and unserviceable goods, even if made for
reduction of space or such other reason and even if
there was no profit motive, they would become
exigible to sales-tax. This was a radical
departure from Raipur Manufacturing Co. but this
was because of the amendment in the definition of
‘business’ in 1964 and not because of any change in
legal principle. This decision would support the
case of the appellant, State of Tamil Nadu, if
however, it was proved that the main activity of
the Port Trust amounted to ’business’.
The words ‘incidental’ in section 2(d)(ii)
came up for consideration in State of Tamil Nadu
vs. Binny Ltd. Madras [1980 Suppl. SCC 686]
cited for the respondent - Port Trust. The company
was having business of manufacture and sale of
textiles. It was also running a store in the
premises of the factory to enable the workmen to
buy provisions which were assessed to tax. The
sales to workmen were on no profit basis. The
company contended that it was only running a
facility for its workmen and its main business was
certainly not that of selling provisions. The
issue related to 1967-68 after amendment of section
2(d) of the Madras Act. The argument that there
should be a "direct" connection between the main
business and these sales of provisions was rejected
by this court and it was held that these sales were
‘incidental’ to the main business and covered by
the amended definition of ‘business’ in section
2(d). Bhagwati, J.(as he then was) adsverted to
the observations of Krishna Iyer, J. in Royal
Talkies, Hyderabad vs. Employees State Insurance
Corporation [1978 (4) SCC 204], a decision under
the ESI Act to the following effect:
"a thing is incidental to another, if it
merely pertain to something else as primary.
surely, such work should not be extraneous or
contrary to the purpose of the establishment but
need not be integral to it either."
It was pointed out that in the case relating
to Royal Talkies, it was held that it was
impossible to hold that a canteen or cycle stand or
cinema magazine booth was not incidental to the
purpose of the theatre. The cinema goers
ordinarily find the above to be facilities,
amenities and sometimes even a necessity. All that
the statute required was that the work should not
be irrelevant to the purpose of the establishment.
Adverting to the facts in the case before them
(i.e. Binny Case), this Court held that if a
canteen maintained by a cinema-owner for the
benefit of cinegoers could be regarded as
‘incidental’ to the purpose of the Cinema theatre,
namely, the business of exhibiting films in the
theatre, it was difficult to see how a store run by
the owner of a Textile undertaking for sale of
provisions to workmen employed in the factory could
be said to be not ‘incidental’ to the business of
manufacture of textiles. [This case stands in
contrast with State of Tamil Nadu vs. Thirumagel
Mills Ltd. [(1972) 29 STC 290(SC)] where, before
amendment of definition of ‘business’ in the
T.N.Act, sales made during the running of a fair
price shop by a spinning mill for benefit of
employees without profit motive were held not
liable to sales tax]. On the same parity of
reasoning, it was held in State of Tamil Nadu vs.
Shakti Estates [1989 (1) SCC 636] that where a
reserve-forest was purchased or taken on lease by a
firm for raising coffee and cardamom plantation
thereon and a portion of the forest produce was
cleared by felling trees and then the cut trees and
natural growth were sold in various forms like
firewood, timber/sleepers/charcoal,- then these
sales were ‘incidental or ancillary’ to the
business. It was immaterial that in these sales
there was no profit motive. In the context, it was
to be noted that a ‘casual dealer’ was also
included in the definition of ‘dealer’ and even
sales effected before the plantation had started
yielding results would be covered. In Indian
Express (P) Ltd. vs. State of Tamil Nadu [(1987)
67 STC 474 (SC)], it was held that the sales of old
and unsold copies of newspapers by a newspaper
publisher as waste paper regularly with profit
motive, were ‘incidental’ to the main business of
printing and publishing newspapers and were liable
to sales tax. This case was followed in The Hindu
vs. State of Tamil Nadu [(1987) 67 STC 477 (SC)]
which related to sales of glazed newsprint by a
newspaper publisher(during the period when the
publication was stopped) and also sales of old
newspapers, print waste and cut waste and these
sales were treated as ‘incidental or ancillary’ to
the main business of printing and publishing of
newspaper and liable to sales-tax. These cases
would be of help to the appellant, State of Tamil
Nadu, if the main activity of the Port Trust
amounted to ’business’.
Learned senior counsel for the appellant,
State of Tamil Nadu contended that merely because
the Port Trust was performing statutory functions
or duties, it could not be contended that there was
no ‘business’ in the eye of the law. It was
pointed out that even the Central Government and
State Governments had been brought within the
purview of the definition of ‘dealer’ in section
2(g) by way of an Explanation. Similarly,
compulsory sales under Control orders had also been
brought within the tax-net.
It is true that in the Explanation 2 to
section 2(g) which defines ‘dealer’, the Central
Government and State Governments have been brought
within the definition of ‘dealer’ in certain
respects. In District Controller of Stores,
Northern Railway, Jodhpur vs. Assistant Commercial
Taxation Officer & another [(1976) 37 STC 423],
relied upon for the appellant, State of Tamil Nadu,
sale of unserviceable stores and scrap by the
Northern Railway were held exigible to sales tax in
view of the enlarged definition of ‘business’ under
the Rajasthan Sales Tax Act, 1954. It was pointed
out that there was no fallacy in thinking that the
Railway, since it was concerned in the activity of
transportation, it was engaged in commerce.
Similarly in Member, Board of Revenue, West Bengal
vs. Controller of Stores, Eastern Railway,
Calcutta [(1989) 74 STC 5], it was held in a batch
of cases that sale of unclaimed goods made the
Railway a ‘dealer’ under section 2(g) of the Bengal
Finance(Sales Tax) Act, 1941. The South Eastern
Railway was a carrier of goods and its activity of
selling goods which remained unclaimed was
adjunctive to its principal activity as carrier of
goods. It was ‘incidental’ or ‘ancillary’ to its
business as carrier of goods. On that basis, in
the same batch, in a case arising from Andhra
Pradesh, the Central Government was held to be a
‘dealer’ within section 2(b) of the Andhra Pradesh
General Sales Tax Act, 1957. There the Central
Government sold, through the Joint Director of
Food, foodgrains and fertilizes to the A.P. State
and other States, for a price fixed by the
Government. Though the tax was levied on the
Government of India, it was stated that this was
for the benefit of the State Governments and
through a machinery of the State tax agency. The
State had power to trade or do business as was
manifest from Article 19(6)(ii) of the Constitution
of India. The trade in essential commodities,
though carried on to fulfil a State obligation of
ensuring even distribution of vital goods to needy
sections of the people, was nevertheless trade or
business. Necessarily, therefore, the Central
Government became a ‘dealer’ by definition as it
carried on business and this was so even if the
State Act excluded the profit motive. Again in M/s
Vrajlal Manilal & Co. and another vs. State of
Madhya Pradesh and another [AIR 1986 SC 1085] it
was held that the M.P.General Sales Tax Act, 1959
was amended by enlarging the definition of ‘dealer’
in section 2(d) and that the Explanation added
brought the Central or State Governments within the
purview of the said definition. Then in the seven
Judge decision in M/s Vishnu Agencies (Pvt.) Ltd.
vs. Commercial Tax Officer and Others [1978 (1)
SCC 520], this Court had to consider the
transactions of supply of cement by a distributor
to a permit holder in terms of the W.B.Cement
Control Act and Control Order to find out if they
amounted to ‘sale’ within section 2(g) of the
Bengal Finance (Sales Tax) Act, 1941. The case was
also concerned with the compulsory sales of paddy
by paddy grows to licensed agents appointed by the
State Government under the A.P. Paddy Procurement
(Levy) Orders. The issue related to the absence of
a consensual option as between the parties to the
bargain. It was held that a transaction effected
in compliance with the obligations imposed by
statute might nevertheless be a ‘sale’ in the eye
of the law, so long as mutual assent, express or
implied, was not excluded. There was no obligation
for a trader to deal with business in these
controlled goods. But once a dealer opted, he was
bound to trade strictly within the terms of the
Control orders. Further though the terms were
mostly predetermined by statute, it could not be
said that there was no area or scope for parties to
bargain. Thus, these sales were held liable to
sales-tax. These decisions could help the
appellant, State of Tamil Nadu, if the main
activity of the Port Trust amounted to ’business’.
In this context reference was also made by the
appellant’s senior counsel to Food Corporation of
India vs. State of Kerala [1997 (3) SCC 410] as a
case where the services were governed by statute.
In that case, purchase of food grains by the Food
Corporation of India pursuant to levy orders issued
under section 3 of the Essential Commodities Act
were held liable to sales tax under the U.P.Sales
Tax Act, 1948. The facts of the case showed that
the FCI had reserved the right to accept or reject
the offer of the State. Several earlier judgments
relating to sales which were governed by Control
orders were approved by the three Judge Bench. But
this ruling cannot help the appellants because the
Food Corporation, as seen from the preamble of the
Food Corporation Act, 1964 was established for
purpose of trading in food grains and other food
stuffs. Hence the appellants must establish that
the Port Trust was established for carrying on
business.
It will thus be noticed that in all these
cases the main activity of the person or body was
undoubtedly ‘business’ even though the motive of
profit was excluded by statute and even though the
connected, incidental or ancillary sales were
statutorily included in the definition of business.
The question in issue before us is whether the Port
Trust was established by statute to ‘carry on
business’.
We now come to the second category of cases
cited for the respondent, Port Trust where the main
activity of the person or body does not amount to
‘carrying on business’. If that be the case the
activities will stand far removed from any
business. Let us assume that such "non-business"
activities might result (say) in some scrap or
unwanted material which should be cleared so that
accommodation could be saved. If the sales were
then made with an intention to reduce the
congestion and not with the intention of running an
independent business in the scrap or unwanted
material, then would they be liable to sales-tax?
If in such situations, the activities of sale of
the scrap or unwanted material were only a very
infinitesimal part of the activities when compared
with the main "non-business" activity, could they
be brought under the tax net?
In our view, if the main activity was not
‘business’, then the connected, incidental or
ancillary activities of sales would not normally
amount to ‘business’ unless an independent
intention to conduct ‘business’ in these connected,
incidental or ancillary activities is established
by the revenue. It will then be necessary to find
out whether the transactions which are connected,
incidental or ancillary are only an infinitesimal
or small part of the main activities. In other
words, the presumption will be that these
connected, incidental or ancillary activities of
sales are not ‘business’ and the onus of proof of
an independent intention to do ‘business’ in these
connected, incidental and ancillary sales will rest
on the Department. If, for example, these
connected, incidental or ancillary transactions are
so large as to render the main activity
infinitesimal or very small, then of course the
case would fall under the first category referred
to earlier.
We shall now refer to a few decided cases
where such questions have arisen and which have
been cited for the respondent, Port Trust.
One of the earliest of the cases where the
‘object or purpose’ of the main activities fell for
consideration was the case decided by the Chagla,
CJ in the Bombay High Court in State of Bombay vs.
Ahmedabad Education Society [(1956) 7 STC 497
(Bom)]. In that case, an Educational society was
entrusted with the task of founding a College and
for that purpose to construct buildings therefor.
It was held that it could not be said to be
‘carrying on business’ merely because for the above
purposes, it established a brick kiln and sold
surplus brick and scrap at cost price without
intending to make profit or gain. Having regard to
its principal activities and its objects, it was
held that the Educational Society was not
established to ‘carry on business’ and the sale of
bricks were held not exigible to sales tax.
Chagla, C.J. pointed out that it was not merely
the act of selling or buying etc. that constituted
a person a ‘dealer’, but that the ‘object’ of the
person who carried on the activities was important.
The learned Chief Justice said that it was not
every activity or any repeated activity seriously
undertaken which resulted in sale or supply of
goods that could attract sales tax. If it was the
intention of the Legislature to tax every sale or
purchase - irrespective of the object of the
activities out of which the transactions arose -
then it was unnecessary to state that the person
must ‘carry on the business’ of selling, buying
etc. No doubt, when this case was decided, the
statute did not include the connected, incidental
and ancillary activities in the definition of
‘business’. But, even so the principles enunciated
are, with respect, correctly stated and support the
case of the respondent, Port Trust.
In Girdhari Lal Jiwanlal vs. Assistant
Commissioner of Sales Tax (Appeals), Nagpur [1957
Vol.8 STC 732(Bom)], relied on for the respondent-
Port Trust, the Bombay High Court held that an
agriculturist did not necessarily fall within the
definition of a ‘dealer’ under section 2(c) of the
CP & Berar Sales Tax Act (Act 21 of 1967), merely
because he sold or supplied commodities. It must
be shown that he was carrying on a business. It
was held that it must be established that his
primary intention in engaging himself in such
activities must be to carry on the business of sale
or supply of agricultural produce. The High Court
held that there was "nothing to show that the
petitioner acquired these lands with a view to
doing the business of selling or supplying
agricultural product. According to the assessee,
he was principally an agriculturist who also deals
in cotton, coal, oil-seeds and groundnuts". He was
having agriculture for the purpose of earning
income from the fields but there was nothing to
show that he acquired the lands with the primary
intention of doing business of selling or buying
agricultural produce. This decision was approved
by this Court in Dy. Commissioner of Agricultural
Income-tax & Sales-tax vs. Travancore Rubber & Tea
Co. [1967 vol.20 STC 520(SC)] and it was held that
where the only facts established were that the
assessee converted latex tapped from rubber trees
into sheets and effected a sale of those sheets to
its customers, the conversion of latex into sheets
being a process essential for transport and
marketing of the produce, the department had failed
to prove that"the assessee was formed" with a
commercial purpose. The Allahabad High Court in
Swadeshi Cotton Mills Co.Ltd. vs. Sales Tax
Officer [(1964) 15 STC 505 (All.)] was dealing with
a batch of cases where different bodies were
running canteens. One of the cases concerned the
Aligarh Muslim University which was maintaining
dining halls where it was serving food and
refreshments to its residents-students. It was
held, referring to observations of this Court in
University of Delhi & Another vs. Ram Nath &
Others [AIR 1963 SC 1873] that it was incongruous
to call educational activities of the University as
amounting to ‘carrying on business’. The activity
of serving food in the dining hall was a minor part
of the overall activity of the University.
Education was more a mission and avocation rather
than a profession or trade or business. The aim of
education was the creation of a well-educated,
healthy, young generation imbued with a rational
and progressive outlook of life. On this
reasoning, it was held that the Aligarh University
was not ‘carrying on business’ and the sale of food
at the dining halls was not liable to tax.
Likewise after the amendment of definition of
‘business’ question arose in India Institute of
Technology vs. State of UP [(1976) 38 STC
428(All)], with respect to the visitor’s hostel
maintained by the Indian Institute of Technology
where lodging and boarding facilities were provided
to persons who would come to the Institute in
connection with education and the academic
activities of the Institute. It was observed that,
the statutory obligation of maintenance of hostel
which involved supply and sale of food was an
integral part of the objects of the Institute. Nor
could the running of the hostel be treated as the
principal activity of the Institute. The Institute
could not be held to be doing business. Similarly,
in the case of a Research organisation, in Dy.
Commissioner (C.T), Coimbatore vs. South India
Textile Research Association [(1978) 41 STC 197
(Mad)], which was purchasing cotton and selling the
cottonyarn/cotton waste resulting from the
research activities, it was held that the Institute
was solely and exclusively constituted for the
purposes of research and was not carrying on
‘business’ and these sales and purchases
above-mentioned could not be subjected to
sales-tax. Likewise, in State of Tamil Nadu vs.
Cement Research Institute of India [(1992) 86 STC
124(Mad)], it was held that the Institute was an
organization the objects of which were to promote
research and other scientific work, that the
laboratories and workshops were maintained by the
organization for conducting experiments, and that
though the cement manufactured as a result of
research was sold, it could not be considered to be
a trading activity within section 2(d) of the Tamil
Nadu General Sales Tax Act, 1959. Again in
Tirumala Tirupati Devasthanam vs. State of Madras
[(1972) 29 STC 266(Mad)] the dispute arose with
regard to the sales of silverware etc. which are
customarily deposited in the Hundis by devotees.
It was held by the Madras High Court that the
Devasthanam’s main activities were religious in
nature and these sales were not liable to tax. (No
doubt, the case related to a period where the
profit motive was not excluded by statute). We are
of the view that all these decisions involve the
general principle that the main activity must be
‘business’ and these rulings do support the case of
the respondent-Port Trust.
Finally, we come to the Naval Dockyard Case in
Base Repair Organisation, (Now Naval Dockyard),
Visakhapatnam vs. The State of A.P. [(1983) 53
STC 223(AP)]. Here the Naval Dockyard was
established for repairing and servicing ships of
the Navy. It was obliged by section 46 of the
Factories Act to run a canteen to cater to the
needs of its employees and the canteen was run on
no-profit no loss basis. It was held that the
sales in the canteen were not liable to sales tax.
It was held as follows:
"It should be noticed that the canteen is not
only being run in discharge of a statutory
obligation, but that it constitutes an
infinitesimal and insignificant part of the entire
activity of the assessee. Having regard to the
nature of the functions and the purpose for which
the Naval Dock yard is established, and also
because of the fact that the canteen subserves the
main object and purpose of the assessee and is an
integral and inseparable part of it, it would be
unrealistic to separate the said activity and treat
it as a business."
We are in entire agreement with the above
elucidation of the law and the conclusion and these
observations support the case of the respondent -
Port Trust.
Learned senior counsel for the appellant,
State of Tamil Nadu, however, relied upon the
certain other observations in the above case. The
observations relied upon are as follows:
"Sub-clause (ii) is in the nature of an
explanation. It says that any transaction in
connection with or incidental or ancillary to
trade, commerce, manufacture, adventure or concern,
referred to in sub-clause (i), shall equally be a
business. The contention of Mr.Venkatarama Reddy
is that, on the same parity of reasoning, inasmuch
as the main activity of the petitioner does not
amount to trade, commerce or manufacture, the
ancillary or incidental activity of running a
canteen cannot equally amount to business. It is
not possible to agree with this submission."
Thereafter, the High Court observed:
"According to the definition, if the main
activity is in the nature of trade, commerce or
manufacture, any ancillary or incidental
transaction, be it per se in the nature of trade,
commerce or manufacture or not, is also treated as
‘business’. But the converse is not true. In
other words, if the main activity is not business,
but if an ancillary or incidental activity is per
se business, the incidental or ancillary activity
does not cease to be business, merely because it is
ancillary or incidental to the main activity, which
itself is not business. The definition is not
capable of being read in such a manner."
We agree with the above observations subject
to the following clarification or modification. If
the main activities are ‘business’ then the sales
in connection with or incidental or ancillary
thereto need not have been intended as a business
or commercial activity. Their mere connection with
or being incidental or ancillary to something else
which was ‘business’ was sufficient to include such
sales in the main business. The second part of the
last extract starting with the words ‘But the
converse is net true’,are to be modified to mean
that if the main activity falling under sub-clause
(i) did not amount to business, normally these
sales made in connection with or were incidental or
ancillary to the main activity would not be
’business’ but there could still be an exception
where the sales so connected or incidental or
ancillary to the main "non-business" activity were
proved to have been made with an independent
intention to do business and the burden of proof to
prove the exception would fall on the revenue. In
our view, the Andhra Pradesh High Court did not, in
the above passage, imply that even where the main
activities were not business, the assessee must
prove want of an intention to carry on business in
the connected, incidental or ancillary activity
which involved sales. It is possible, in
exceptional cases that such latter sales could per
se be business having been proved by the revenue to
have been carried in with such an explicit
intention. The burden, as already stated, would
here lie on the revenue.
Then the learned senior counsel for the
appellant-State relied upon yet another passage
from the above judgment of the Andhra Pradesh High
Court which reads as follows:
"We must make it clear that there is a
definite distinction between an activity which is
ancillary or incidental to the main activity and an
activity which is an integral part of the main
activity. In the first case, the incidental or
ancillary activity is a distinct activity, though
it is incidental or ancillary to the main
activity."
On the facts of the case before the Andhra
Pradesh High Court, the canteen activity was
treated as a requirement of statute and also as an
integral part of the main activity and was,
therefore, not business. If the Andhra Pradesh
High Court meant that incidental or ancillary sales
or sales made in connection with a main activity,
(which main activity was not in itself business),
in order to escape liability should always be
proved by the assessee to be an integral part of
the main "nonbusiness" activity, we are not
inclined to agree. In our view, that would erase
the distinction between sales which were integral
with the main "non-business" activity and those
which were incidental or ancillary or connected.
In the first place, if these sales were an integral
part of the main "non-business" activity, they were
not incidental or ancillary and would present no
difficulty in leading to the conclusion that they
were not taxable. But if the sales were connected
or incidental or ancillary to the "non-business"
activity then, as stated earlier, there would be a
presumption that they were not intended to be
‘business’. It would then be for the revenue, in
any exceptional case to prove that, in respect of a
"non-business" activity the ancillary or incidental
sales were independently intended to be carried on
as a separate business. To this extent, we modify
the principle stated in the Andhra Pradesh High
Court in the Naval Dockyard case.
That brings us finally to the question whether
the Port Trust was established under the Major Port
Trusts Act, 1963 for ‘carrying on business’?
The observations of this Court in Trustees of
Port of Madras vs. M/s Aminchand Pyarelal & Others
[1976 (1) SCR 721] in connection with the earlier
Madras Port Trust Act were strongly relied upon by
the learned senior counsel for the respondent -
Port Trust. In that case Chandrachud, J.(as he
then was) observed (at p.735) as follows:
"Port Trusts do not do the business of
warehousing goods and the rates which the Board
charges for storage of goods are not levied as a
means of collecting revenues. The Board is under a
statutory obligation to render services of various
kinds and those services have to be rendered not
for the personal benefit of this or that importer
but in the larger national interests."
The above observations clearly show that Port
Trusts are not established for carrying on
business.
Coming to the Major Port Trusts Act, 1963
(before amendment by Act 15/97), Chapter V refers
to "works and services to be provided by ports"
(sections 35 to 47) while Chapter VI deals with
‘Imposition and Recovery of Rates at Ports’
(sections 48 to 65). Section 35(a) refers to
various works and appliances to be provided by the
Ports, namely,wharves, quays, docks, stage,
jetties, piers etc. within the port or port
approaches or on the foreshore of the port or port
approaches, with all convenient articles, drains,
landing places, stains, fences, roads, railways,
bridges, tunnels and approaches and buildings
required for the residence of the employees of the
Board as the Board may consider necessary; section
35(b) refers to providing buses, railways,
locomotives, rolling stock, sheds, hotels,
warehouses and other accommodation for passengers
and goods. The port is required to provide
appliances for carrying passengers and for
conveying, receiving and storing goods, landed or
to be shipped etc.; section 35(c) requires the
port to provide moorings and cranes, scales and all
other necessary means; appliances for loading and
unloading vessels; section 35(d) requires the Port
to take up work for reclamation, excavation,
enclosing and raising any part of the foreshore of
the port or port approaches which may be necessary
for the execution of the works authorised by the
Act, or otherwise for the purposes of the Act;
section 35(e) requires the port to provide such
breakwaters and other works as may be expedient for
the protection of the port; section 35(f) requires
it to provide dredges and other machines for
clearing, deepening and improving any portion of
the port or port approaches or of the foreshore of
the port or port approaches; section 35(g)
requires to provide light hours, lightships,
beacons, buoys, pilot boats etc; section 35(h)
requires it to provide vessels, tugs or other
boards for use or for towing vessels or for
protecting life or property and for purposes of
landing, shipping or transshipping passengers or
goods under section 42; section 35(i) requires it
to provide tubewells and equipment, maintenance and
use of boats, bongs and other appliances for
extinguishing fires; section 35(k) requires it to
provide construction models and plans for carrying
out hydraulic studies; section 35(l) requires it
to provide dry docks, slipways, boat basins and
workshops for carrying out repairs or overhandling
of vessels, tugs boats, machinery etc. Section
35-A, 36 also refer to other works.
We have referred to the Port Trust’s
activities and services in some detail only with a
view to show that the port trust was not
constituted by Parliament to ‘carry on business’ as
stated in M/s Aminchand Pyarelal’s case [1976 (1)
SCR 721]. We have given the long list of its
activities and services only to show how
infinitesimal are the sales of unserviceable or
unclaimed goods as compared to the very large range
of the activities and services it is supposed to
render.
In view of
the requirements of sections 37, 39 and 42 ships
come to the ports and carry goods outside or bring
goods inside our country. Under section 43, the
Board is liable for the loss, destruction or
deterioration of goods of which it has taken charge
in the manner provided in the sections. Under
section 44, accommodation is to be provided for
customs officers in the wharves etc. Chapter VI
deals with imposition and recovery of rates at
ports. Sections 48 to 57 deal with the rates.
The more important provisions for the present
purpose are those in Sections 58 to 65 in Chapter
VI. They deal with the Board’s lien for rates on
the goods which, in enforcement of the lien could
be seized & detained till such rates and rents are
fully paid. Section 61 refers to sale of goods
after 2 months if rates or rent are not paid or
lien for freight is not discharged. Section 62
refers to disposal of goods not removed from
premises of Board. Section 63 mentions how the
sale proceeds are to be dealt with - in payment of
liens, claims, other charges, demurrages, penalties
etc. From the above provisions, in our opinion, it
is clear that the Port Trust is not involved in any
activity of ’carrying on business’ as has been
clearly held in Aminchand Pyarelal’s case(supra)
and that unclaimed and unserviceable goods are sold
in discharge of various statutory charges, items
etc. and the sales of these items are also an
infinitesimal part of the Port Trust’s main
activities or services. No doubt, the sales of
goods are in connection with, or incidental or
ancillary to the main "non-business" activities,
but they cannot be treated as ‘business’ without
any plea by the State of Tamil Nadu that the Port
Trust had an independent intention to carry on
business in the sale of unserviceable/unclaimed
goods. That is not the case of the Department in
the show cause notice. Further from the counter-
affidavits filed in the High Court it is clear that
it is not the case of the State that there is any
separate intention on the part of the Port-Trust,
to carry on business in the unserviceable &
unclaimed goods. Its contention has been that the
main activities of the Port Trust amounted to
‘carrying on business’ and that these sales, even
if they were incidental, fell within the meaning of
the word ‘business’. The argument fails in view of
our finding that the main activity is not one
amounting to ’carrying on business’.
In our view, the conclusions arrived at by the
Madras High Court in State of Madras vs.Trustees of
Port Trust of Madras [(1974) 34 STC 135(Mad)] which
ruling was followed by the Andhra Pradesh High
Court in Board of Trustees of the Visakhapatnam
Port Trust vs. Commercial Tax Officer & Another
[(1979) 43 STC 36(AP)] and the conclusions arrived
at in the judgment under appeal by the Madras High
Court holding that such sales are not exigible to
tax, are correct, though for the reasons given by
us in this judgment. We do not accept the
contention of the appellants that at this stage the
respondent should be directed to file its reply
before the department and go by the alternative
remedies under the Act. In view of the case set up
by the State in the show cause notice, it is not
necessary to drive the respondent - Port Trust to
the remedy under the Sales Tax Act. The submission
for the appellants that the Port Trust was a local
authority need not also be gone into for, even
then, the question will be whether it was carrying
on business. Nor does the amending Act 31 of 1992
have any bearing on this question.
The intervention applications are dismissed.
For the aforesaid reasons, the appeal is
dismissed but in the circumstances, without costs.