DIRECTOR OF SUPPLIES & DISPOSALS, CALCUTTA vs MEMBER, BOARD OF REVENUE, WEST BENGAL,CALCUTTA

The Supreme Court analyzed Section 2(c) of the Bengal Finance (Sales-tax) Act, 1941, which defines a 'dealer' as any person engaged in the business of selling goods, including the Government. The Court held that the Government of India, in disposing of surplus war material, was not acting as a dealer since it was merely realizing capital rather than conducting a business for profit. Consequently, the transactions were not subject to sales tax under the Act. Justice Shah dissented, arguing that the organized nature of the sales indicated a business operation, thus making the Government liable for sales tax.