STATE OF PUNJAB & Anr. v. M/S. BAJAJ El,ECTRICALS LTD

Grainger and Son v. Gough (Surveyor of TaXLs) 3 T.C. 464, F.L. Smilli & Co. v. F. Greenwood (Surve, vor of Ta.re.<), 8 T.C. 193 and Firestone 'fyre Co. Ltd. v. Lewr//in, 37 T.C. 111. distinguished. F C1vu. APPELLATE JURISDICTION: Civil Appeal No. 287 of

#1967. Appeal from the judgment and order dated May 29, 196-4 of the Punjab High Court.in Civil Writ No. 1609 of 1961. Harba11s Singh and R. N. Sachthey, for the appellants. The Judgment of the Court was delivered by Shah, J. The respondent-a Joint Stock Company-has its principal place of business in Bombay, and a branch office New Delhi. The Assessing Aulhority, Kamal, exercising power under the Punjab Professions, Trades, Callings and Employments Taxation Act 7 of 1956, assessed the respondent to profession tax G H A B c D E F G H PUNJAB V. BAJAJ ELECTRICALS LTD. (Shah, /.) 537 for the years 1960-61 and 1961-62 and issued a notice of demand for the amount so assessed. The High Court of Punjab quashed the notice; of demand and the assessm~nt orders holding that the respondent did not carry on trade w1thm the State of Punjab and was not liable to be assess~d to tax un~er the Act. The State of Punjab has appealed to ,this Court agamst the order of the High Court. Section 3 of Act 7 of, 1956 provides : "Every person who carries on trade, either by him self or by an agent or representative, or who follows a profession or calling or who is in employment, either wholly or in part, within the State of Punjab, shall be liable to pay for each financial year or a part thereof a tax in respect of such profession, trade, calling or em ployment. Provided The respondent, it is common ground, has no branch office or any other place of business in the State of Punjab. It has also .not appointed any agent or· representative to carry on business on its behalf within the State. The respondent supplies goods to Government of Punjab and certain "semi-Government bodies" in the State in execution of orders received at its branch office at Delhi. The goods are despatched from Delhi by rail or by pub lic motor transport. Pursuant to the terms and conditions of the "Rate Contract" between the respondent and 1 the Controller of Stores for the S'.ate of Punjab, the respondent consigns the goods sold by it to the appropriate Government DepartmenfF.0.R. des Inspection of the goods i; made within the State of tination. Punjab. The price for the goods sold is colle_cted by presenting bills or railway receipts through Banks to the consign=. The Assessing Authority held that the respondent "may rea sonably be regarded as selling good> within" the State of Punjab because it was supplying goods F.O.R. destination. The High Court held that the respondent could not in law be regarded as carrying on trade at the place at which the goods were supplied, merely because the railway or other receipts were taken out in the name of the respondent and presented to the purchasers duly en dorsed in their favour to se.cure realization of the price of the goods. Liability to pay tax under. Act 7 of 1956 arises if a person car ries on trade by himself, or through his agent, or follows a pro fession or is in employment within the State, and not otherwise. The expression "trade" is not defined in the Act. "Trade" in its primary meaning is the ,exchanging of goods for goods or goods for moll, lly; in its secondary meaning it is repeated activity in the 538 SUPREME COURT REPORTS [1968) 2 S.C.R. nature of business carried on with a profit motive, the activity being manual or mercantile, as distinguished from the liberal arts or learned professions or agriculture. The question whether trade is carried on by a person at a given place must be determin ed on a consideration of all the circ"umstances. No test or set of tests which is or are decisive for all cases can be evolved for deter mining whether a person carries on trade at a particular place. The question, though one of mixed law and fact, must in each case be determined on a consideration of the nature of the trade, the various steps taken for carrying on the trade and otht~r rele vant facts. In the prescn! case, the respondent has no shop or office with in the State of Punjab. The respondent supplies goods within the State pursuant to orders received and accepted at New Delhi, and also receives price for the goods within the State. But these arc ancillary activities and do not in our judgmcct amount to carrying on trade within the State of Punjab. We need not refer in detail to case; such as Grainger and Son v. (iouf?h (Surveyor of Taxes)('); F. L. Smi!h & Co. v. F. Greenwood (Surveyor of Taxes)( 2 ) which in terpret the expression "trade exercised within the United Kingdom" in the English Income Tax Acts, for they merely Jay down for the purpose of the Income Tax Acts, there is no single, deci sive or "crucial" test to determine whether the tax-payer exercises trade at a given place. ); and Firestone Tyre Co. Ltd v. Lewe/lin,( 8 The appeal fails and is dismissed. The respondent has not appeared at the hearing. There will, therefore, be no order as to costs. Y.P. Appeal dismissed. A B c D E '!l (I) 3 T.C. 464. (2) 8 T.C. 193. (3) 37 T.C. 111.