State Of Andhra Pradesh vs Abdul Bakhi And Bros on 8 April, 1964
at page 401, their Lordships of the Supreme Court again reiterated the observations in State of Andhra Pradesh v. H Abdul Bakshi ([1964] 15 S.T.C. 644.) that in taxing statutes the word "business" is used in the sense, of an occupation or profession which occupies the time, attention and labour of a person, normally with the object of making profit. In that case the Director of Supplies and Disposals had disposed of surplus goods purchased on behalf of the Government of India on the conclusion of the last war and for that purpose he had put in a series of transactions with the help of one separate organisation. The question had arisen whether the Director of Supplies and Disposals carried on a business of selling goods and was a dealer. The majority view of Sikri and Ramaswami, JJ., was that the Director was not carrying on the business of buying or selling goods. He was not selling surplus goods for profit but he was merely disposing of the surplus material by way of realisation and the transactions were, therefore, not taxable as sales under the Act. At page 405 in the majority decision it was pointed out that to regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit-motive; there must be some real and systematic or organised course of activity or conduct with a set purpose of making profit. To infer from a course of transactions that it is intended thereby to carry on business, ordinarily there must exist the characteristics of volume, frequency, continuity and system indicating an Intention to continue the activity or carrying on the transactions for a profit. Their Lordships pointed out that no single test or group of tests was decisive of the intention to carry on the business. It must be decided in the circumstances of each particular case.