STATE OF TAMIL NADU vs BOARD OF TRUSTEE OF PORT OF MADRAS

The Supreme Court upheld the decision of the Madras High Court, which quashed notices issued by the Commercial Tax Officer against the Madras Port Trust under the Tamil Nadu General Sales Tax Act, 1959. The Court reaffirmed that the Port Trust, while providing services such as water supply to ships, was not engaged in 'business' as defined under Section 2(b) of the Act, since it was discharging statutory duties without profit motive. The judgment clarified that the Port Trust does not qualify as a 'dealer' under the sales tax legislation, thus reinforcing the precedent set in Trustees of the Port of Madras vs. State of Madras, 1960 (11) STC 224 (Mad).