JUDGMENT
1. The question of law referred in this reference by the Sales Tax Appellate Tribunal (Board of Revenue) is as follows :
Whether, under the facts and circumstances of the case, the sale of second hand car by the assessee was a sale in the course of business and hence liable to be taxed ?
2. The assessee is a dealer in cosmetics, milk, ghee, etc. The assessee sold an old car for Rs. 16,000. The question is whether the price of this car can be included in the assessee’s turnover. The finding recorded by the Tribunal is that the car was not used as ancillary to the assessee’s business. The department’s case that the car was used for transporting the commodities in which the assessee carried on business was not found to be correct. All that was found was that the car was used for the conveyance of the partners. The law on this point has been stated by this Court in Commissioner of Sales Tax v. Project Automobiles [1978] 42 STC 279. It was held in that case that sale of a motor car which was not only incidental but also ancillary to and connected with the business carried on by the assessee was taxable as it came within the definition of the word “business”. In the instant case, on the finding reached that the sale of the car was not ancillary to the business of the assessee, the same cannot be included in the turnover and cannot be taxed.
3. For the reasons stated above, our answer to the question referred is that the sale of the second hand motor-car could not be taxed. There will be no order as to costs of this reference.
