Subramonian Poti, Ag. C.J.
1. The revision petitioner is an assessee under the Kerala General Sales Tax Act and the assessment in question concerned the year 1972-73. While completing the assessment for that year the Sales Tax Officer, Karunagappally, levied tax under Section 5A in respect of value of river sand and charcoal amounting to Rs. 33,963.80 and Rs. 1,225.81 respectively. The petitioner is manufacturing concrete pipes. River sand is the raw material required for such manufacture. Charcoal is also goods used in the manufacture. Evidently tax under Section 5A has been imposed in regard to the purchase of river sand as well as charcoal on the assumption that the purchases have been made by the assessee under circumstances in which no tax is payable. There was also another item of dispute and that concerns the turnover of sale deemed to be involved in the supply of waste material by the assessee to a contractor who in the same premises converts such waste material into hollow bricks. The turnover in this behalf has been estimated as Rs. 14,000 and tax as 3| per cent.
2. Though the tax under Section 5A relates both to purchase of river sand and charcoal the revision petitioner does not press his case with regard to the taxability of the turnover of charcoal. We are only concerned with river sand. It is said that the entire river sand is purchased from one contractor and the purchase turnover of Rs. 33,963.80 exceeds the minimum turnover which makes a dealer taxable during the relevant year. Consequently it is said that irrespective of the question whether the contractor who supplies river sand to the assessee was taxed or not, irrespective of even the question whether he had registered himself as a dealer or not there is no liability for the assessee under Section 5A.
3. Section 5A is intended to drag into the net of taxation transactions of purchase where such transactions are not liable to suffer tax in the hands of the seller and the goods do not return to the commercial stream for the purpose of being taxed. If goods purchased by a dealer are consumed or used in the manufacture of other goods no doubt the goods so manufactured are subjected to tax, but if the components are not likely to suffer tax as such components they are taxable under Section 5A. The question is not whether the sales tax authorities have imposed tax upon the transaction in the hands of the seller to the assessee, but whether that is liable to be so taxed. In this case it is very clear that the person who sold to the assessee had a turnover in excess of the minimum and irrespective of the question whether he was registered as a dealer or not he was liable to pay tax under the General Sales Tax Act. If so, it cannot be said that transaction of purchase by the assessee was under circumstances in which no tax was payable under Section 5. Hence with regard to the turnover of river sand there will be no liability in the assessee to pay tax. To that extent the revision petitioner succeeds.
4. The second question raised the liability to tax of the material which is evidently a bye-product passed on to a contractor as raw material for manufacture of hollow bricks. The learned counsel for the revision petitioner contends that the extended definition of the term 'business' would not be applicable as such amendment of the General Sales Tax Act is only after the assessment year in question. The extention of the definition does not call for application in this case. 'Sale' as defined in the Act takes in sale 'in the course of business'. A sale may be by a dealer not only of the main product that he produces, but also of the subsidiary product which would also be in the course of business. If, in the process of manufacture of concrete pipes, the bye-products which the dealer may choose to call as waste material but which is of commercial value, become available for sale (the sale) by him of such material would be a regular phenomena depending on his business activity and therefore such sale would also be in the course of business. It is not incidental to the business. In that view, the taxation of the amount of Rs. 14,000 taken as representing the value of the bye-product sold cannot be said to be objectionable. There is no dispute as to the quantum and therefore that question does not arise. Hence the contention that the assessee is not liable to tax on the sale of what he terms as 'waste' cannot succeed. The revision petition is disposed of as above. No costs.