Andhra HC (Pre-Telangana)
State Of Andhra Pradesh vs Food Corporation Of India. on 24 June, 1996
Equivalent citations: [1997]106STC293(AP)
Author: Syed Shah Mohammed Quadri
Bench: B. Sudershan Reddy, S.S. Mohammed Quadri
JUDGMENT Syed Shah Mohammed Quadri, J.
1. The State is the petitioner in this tax revision case. In challenges the validity of the order of the Tribunal in T.A. No. 1107 of 1979 dated December 17, 1986. The dispute relates to the assessment year 1972-73 and it arose under the Central Sales Tax Act, 1956 (for short, "the Act"). The short question that arises for consideration in this case, is whether the Food Corporation of India (for short, "the FCI"), Central Government, is "dealer" within the meaning and expression in section 2(b) of the Act. In the assessment order, the definition of the "dealer" as it stood before the amendment of section 2(b) of the Act by Act 103 of 1976, was as follows :
"'dealer' means any person who carries on the business of buying or selling goods, and includes a Government which carries on such business."
2. It is concluded by a Division Bench judgment of this Court in T.R.C. No. 28 of 1976 and batch dated December 3, 1976 that the FCI is an agent of the Central Government selling the goods on behalf of it and is, therefore, a "dealer", but that, however, would not conclude the issue because for purposes of the definition carrying on business is also necessary. As it stood before the amendment of section 2(b) by Act 103 of 1976, profit-motive was a necessary ingredient of "business" under the Act. In the instant case, a finding is recorded to the effect that the FCI was distributing the fertilizers as per allotment made by the Agriculture Department to the States or their nominees and that there was no profit-motive. In view of those findings it cannot but be held that it was not a "dealer" during the relevant period for purposes of exigibility of tax under the Act. In Joint Director of Food v. State of Andhra Pradesh while confirming the judgment of this court, the Supreme Court laid down that the systematic activity of buying foodgrains and fertilizers and selling them by the State, although in fulfilment of a beneficent national policy was nevertheless trade or business; but the assessee would become a "dealer" under the Act only if there was a profit-motive in the sales effected by the assessee to the Andhra Pradesh State.
3. For the above reasons, the tax revision case is liable to be dismissed and accordingly it is dismissed. No costs.
4. Petition dismissed.