Sabyasachi Mukharji, J.
1. In this reference under Section 21(3) of the Bengal Finance (Sales Tax) Act, 1941, the following question, as directed by this court, has been referred :
Whether, on the facts and in the circumstances of the case, the Iron and Steel Controller while disposing of the surplus steel and the T. C. A. steel and the leaflets, etc., was carrying on a business of selling the said goods within the meaning of Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941, and, as such, was a dealer within the meaning of Section 2(c) of the said Act.
2. There was a Technical Co-operation Aid Scheme hereinafter referred to as the T. C. A. under which the Government of India got loan and gift of dollars from the Government of the United States with which the Government of India secured iron and steel from foreign countries, having invited global tenders, and the iron and steel so imported were sold at cost price or below the cost price through the Iron and Steel Controller of the Government of India to various industries, development projects and artisans. There were also some sales of surplus war materials and leaflets by the Iron and Steel Controller. On the information that the Iron and Steel Controller was liable to pay tax under the Bengal Finance (Sales Tax) Act, 1941, in respect of the period commencing from 1st January, 1953, and ending with 31st December, 1958, but had failed to get himself registered under the said Act, the Commercial Tax Officer, Lyons Range Charge, issued a notice under Section 11(2) and Section 14(1) of the aforesaid Act to the said Iron and Steel Controller on 8th April, 1959. The said Commercial Tax Officer, Lyons Range Charge, while assessing the dealer for the aforesaid periods gave a hearing to the dealer's authorised representative and ultimately assessed the Iron and Steel Controller as a dealer as per statement of accounts produced by the dealer by his order dated 12th November, 19.59, after having overruled the objection that the Iron and Steel Controller was not carrying on the business of selling goods within the meaning of Section 2(c) of the Act and, as such, was not liable to pay any tax. The Iron and Steel Controller then filed an appeal before the Assistant Commissioner of Commercial Taxes, Chowringhee Circle. The said Assistant Commissioner of Commercial Taxes gave a hearing to the dealer and held that the dealer was carrying on the business of selling goods within the meaning of Section 2(c) of the Act and was liable to pay tax, but remanded the appeal for allowing the dealer's claim for exemption under Section 5(2)(a)(ii) of the Act, that is to say, in respect of the sales to the registered dealers. Being dissatisfied with the above order, the Iron and Steel Controller filed a revision petition before the Commissioner of Commercial Taxes, West Bengal. The Additional Commissioner of Commercial Taxes, West Bengal, also rejected the revision petition. Some reliance was placed by the counsel for the Government before us on certain contentions that were raised before the revenue authorities below and the findings of the Additional Commissioner, Commercial Taxes, on the aforesaid point. It is recorded that the counsel for the dealer did not dispute the findings that the dealer had made sales of such goods with which we are concerned in this reference. But it was urged that the authorities below had failed to appreciate correctly the modus operandi of the transactions. The counsel for the assessee stated that under the Technical Co-operation Aid Scheme the Government of India got loan or gift of dollars from the Government of the United States with which they secured iron and steel from foreign countries, having invited global tenders, and iron and steel so imported were distributed to various industries, development projects and even artisans as envisaged in the agreement with the Government of the United States. It was admitted that for such supplies prices were charged and realised by the Iron and Steel Controller, who had acted on behalf of the Government of India in this matter. But it was stated that the prices charged were much below the cost price which the Government had to pay to the foreign suplpiers and this difference was made up through the equalisation fund. With regard to the sales of surplus materials, it wag contended that those were the surplus iron and steel secured by the Government of India during the War period but had become surplus after the cessation of hostilities and thus were sold at much below the cost price. Similarly, it was stated that the sales of forms, price lists, etc., were made for the benefit of the dealers in iron and steel and other interested persons and no profit was made through such sales. The counsel argued that the provision of the Bengal Finance (Sales Tax) Act, 1941, did not envisage that anybody making sales of goods should be treated as a dealer for the purpose of the Act. But, according to the definition of 'dealer', the person selling the goods must be engaged in the business of selling goods and this should necessarily include a motive for making profit in the transactions. It was urged that unless it could be proved that while securing the goods sold and disposing of them the Iron and Steel Controller had the intention of making a profit, he could not be held to be a dealer for the purpose of the Act. These contentions were rejected. We are concerned, it appears, therefore, with three types of goods, namely, the goods sold which were under the T. C. A. agreement, secondly, surplus war materials and, thirdly, leaflets and price lists sold by the Iron and Steel Controller. So far as the goods under the T. C. A. agreement were concerned, the Iron and Steel Controller sold these goods in his discretion or pursuant to the policy laid down by the Government of India, and these goods were sold at mostly below the cost prices. Thereupon the dealer filed another revision petition before the Board of Revenue, West Bengal. The Board of Revenue rejected the contentions and held that the sales represented organised operations in what the Board described as commercial market. In the premises, the revision petition was rejected. There was an application for reference of certain questions of law by the dealer to the High Court, which the Board declined to do so. As mentioned hereinbefore, ultimately, as directed, the Board has referred the aforesaid question to this court. As we have mentioned before, we are concerned with three types of goods. The first type is the goods alleged to have been procured and sold under the T. C. A. agreement. In this connection it may be relevant to refer to the Technical Co-operation Aid Programme between the Government of India and the Government of the United States of America on the subject of the project for the acquisition and distribution of iron and steel for agricultural purposes. The counsel for the dealer handed over to us a copy of the said agreement. We will now refer to certain parts of the said Technical Co-operation Aid Programme as appearing in the said document. It appears that there was an agreement between the two Governments signed by the appropriate authorities on 5th January, 1952. The purpose of the project was to bring about immediate increase of food and agricultural production by making available to the farmers of India improved agricultural implements and equipments, such as steel-point ploughs, spike-tooth harrows, steel cart tyres, irrigation devices and steel fencing. This purpose was sought to be achieved by twofold methods, one was to distribute iron and steel materials to artisans, who would make these materials available for distribution to the farmers. It was also intended to develop an indigenous farm implement manufacturing industry, which would make these kinds of machinery available to the farmers of India for improved production for agricultural purposes. It was contemplated that there would be a steel pool fund of India for the purpose of distribution, and how the distribution would be made by the pool fund was laid down in the said programme, to which we need not refer for the purpose of this reference. The programme also dealt with the administration of the project. It was contemplated that the iron and steel would be distributed through commercial channels or the agency of the State Governments, either departmentally or through co-operative societies, according to the practice then prevalent in the various States or otherwise, as might be deemed to be the most effective method by the Government of India. The distribution of iron and steel materials, it was contemplated, should be under the general supervision of the Ministry of Food and Agriculture. It was then stated that the Iron and Steel Controller would arrange for the necessary allocation so as to assure that the quantity of approximately the same types of iron and steel imported under the project could readily reach the village blacksmiths and the farm machinery and the implement factories for the purposes intended by the agreement. The director and the representative might make additional provisions. Pursuant to this Aid Programme it appears that the Iron and Steel Controller was the authority chosen by the Government of India for implementation and distribution of these materials. The Iron and Steel Controller is a statutory authority, which first came into existence under the Iron and Steel (Control of Production and Distribution) Order, 1941, which fell under the Defence of India Act. The Controller by that Order was given authority for directing acquisition, disposal and sale and the power of removal and incidentally the Controller was also given power under the said Order to fix prices. For the aforesaid purposes, the Controller was given certain powers for production of documents and other incidental matters. under Section 3 of the Essential Commodities Act, 1955, the Iron and Steel (Control) Order, 1956, was promulgated. The Controller under that Order meant the person appointed as Iron and Steel Controller by the Central Government and included any person or body of persons authorised in writing by the Central Government to exercise all or any of the powers of the Iron and Steel Controller with regard to all or any of the categories of iron and steel or scrap. The Controller was given the power of acquisition, disposal and maintenance of warehouses and also the power to direct release or sale and fixing of prices. By Clause 17 of the said Order the Central Government had the authority to give directions as to the procedure to be followed by the authorities issuing quota certificates, permits or written orders as to the maintenance by the Controller of records in connection with the distribution of iron or steel and generally for the purposes of giving effect to the provisions of that Order. Though we were not shown any specific power under which the Government of India could direct the Iron and Steel Controller to take up the sales under the T. C. A. agreement, it must have been the general authority of the Government of India to direct its officers to perform the Government of India activities, which were allied to the work done by the Iron and Steel Controller. The question, in these circumstances, is whether the Iron and Steel Controller in selling these goods could be a 'dealer' under the Act. In this connection we will have to refer to the relevant definition in Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941. It defines 'dealer' as a person who carries on the business of selling goods in West Bengal and includes the Government. under Section 2(g) of the Act 'sale' has been defined to be a transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of a contract, but does not include a mortgage, hypothecation, charge or pledge. Section 2(1a) was added by an Amendment Act, being the West Bengal Taxation Laws (Amendment) Act, 1969 (Act 25 of 1969), whereunder Section 2(1a) was included and it is in the following terms :
(i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with the motive to make profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern ; and
(ii) any transaction in connection with, or ancillary or incidental to, such trade, commerce, manufacture, adventure or concern.
3. We have mentioned before that the said amendment came into effect in 1969 and was introduced with effect from 9th January, 1968, by an Ordinance prior to the Act. The amending Act was clearly retrospective in the sense that the clause introducing the amendment states that it should be and should always be deemed to have been inserted the definition of 'business', which should mean as stated hereinbefore. We will deal with the question whether, in such a case, the Iron and Steel Controller could be considered to be doing of selling goods in terms of the amended definition of business. The first question, therefore, that requires consideration in this case is whether profit is essential in order to be a dealer to carry on business of selling goods under the Bengal Finance (Sales Tax) Act. This question cropped up before the Supreme Court in the case of Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue, West Bengal, Calcutta  20 S.T.C. 398 (S.C.). There, the Directorate of the Disposals, United States Transfer Directorate, was an organisation of the Government of India responsible for the disposal of surplus American war equipment which had been taken over by the Government of India. When the equipment was substantially disposed of, it was merged with the office of the Regional Commissioner of Disposals. Later on the Supply and Disposal Services of the Government of India were merged and the department was redesignated as Directorate of Supplies and Disposals. The function of the Directorate was to dispose of surplus goods and to purchase goods on behalf of the Government of India. A considerable portion of the surplus materials left in India by the American Government at the conclusion of the last war was used by the Government of India itself and there was a huge surplus left with the Government of India which was either no longer useful or had become obsolete. The surplus goods were sold to the public in a series of transactions with the help of a widespread organisation. The question arose whether the Director of Supplies and Disposals carried on the business of selling goods in West Bengal and was a 'dealer' within the meaning of Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941, and had to get himself registered as a dealer under the Act. It was held by the Supreme Court that the Director was not carrying on the business of buying and selling goods within the meaning of Section 2(c) of the Act. The Director was not selling surplus goods for profit but he was merely disposing of the surplus materials by way of realisation and the transactions were, therefore, not taxable as sales under the Act. Therefore it was held that the Director was not a dealer within the meaning of Section 2(c). The Supreme Court also held that the expression 'business', though extensively used in taxing statutes, was a word of indefinite import. In taxing statutes it was used in the sense of an occupation, or profession which occupied the time, attention and labour of a person normally with the object of making profit. 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 was 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 of carrying on the transactions for a profit. But no single test or group of tests was decisive, according to the Supreme Court, of the intention to carry on a business. It must be decided in the circumstances of each particular case whether an inference could be raised that the assessee was carrying on the business of purchasing or selling of goods within the meaning of the statute. Shah, J., as the learned Judge then was, took a contrary view. In the case of Indian Iron and Steel Co. Ltd. v. Member, Board of Revenue, West Bengal  27 S.T.C. 373, a Division Bench of this Court had to consider the question and observed that a person could not be a dealer under the Bengal Finance (Sales Tax) Act, 1941, unless he carried on the business of selling goods in a commercial sense. In other words, the activity of a commercial character must be clearly established before a person could be brought into the net of taxation under the Act. If an employer sold without a profit-motive certain commodities of daily use to the employees to provide them with social amenities, it could not be said that the employer was carrying on the business with a commercial motive. It has to be borne in mind, however, that both these cases dealt with the situation prior to the amendment and the introduction of the definition of 'business' in Clause (la), as mentioned hereinbefore. The question is that after the introduction of Clause (la), whether profit-motive as such was essential for the purpose of carrying on a business. The transactions in question undoubtedly were completed and the assessments were also completed prior to the introduction of the amendment. But the amendment states in clear language that it shall be deemed to have been there always'. If that is the position, then the question arises whether the court in answering a question according to law can ignore the provisions of the subsequent amendment of these types. The amendment in clear language points to the contrary. But a further complication in this case arises by the fact that there is an argument that this amendment in so far as it was retrospective was ultra vires the Constitution as being violative of certain fundamental rights. It is well-settled that a reference court cannot go into the vires of an Act. It is based on the assumption of a notion of physical law that a river cannot rise over its source. Some of the complications that arise from this have been mentioned in the decision of this court in the case of Fort Gloster Industries Ltd. v. Member, Board of Revenue, West Bengal  26 S.T.C. 141, and we need not reiterate those points here again. There the court was concerned with the position after the amendment and it was held that even after the amendment of Section 2 of the Bengal Finance (Sales Tax) Act, 1941, by the West Bengal Taxation Laws (Amendment) Act, 1969, business, trade, commerce, manufacture or adventure or concern must be understood in a commercial sense, carrying a commercial meaning and the dealer according to Section 2(c) of that Act must be a person who carried on 'business' of selling goods. The whole context was that of a business in the commercial sense. All that the amendment had succeeded in doing and what it intended to do was that once there was a business, then, whether it had profit-motive or not or whether it actually made profit or not became immaterial. There the assessee-company, a registered dealer under the Bengal Finance (Sales Tax) Act, 1941, who was carrying on the business of manufacturing and selling jute, ran a canteen for the benefit of its workers. The assessee's articles and memorandum of association did not authorise it to run a canteen, but it had been obliged to do so under Section 46 of the Factories Act, 1948. On the question whether the proceeds of sale through the canteen formed any part of the assessee's turnover, a reference was made to the High Court under Section 21(1) of the Act. Pending the reference, Section 2(1a) was inserted in the Act by the West Bengal Taxation Laws (Amendment) Act, 1969, defining 'business' as including business without profit, and this amendment was made retrospective. It was held by the court that the amended law had to be applied to the case and the High Court had no jurisdiction to go into the question of the vires of the amendment, but the running of the canteen by the assessee was a welfare activity which was not 'business' within the meaning of Section 2 and, therefore, the sale proceeds of the canteen did not form part of the assessee's turnover. It might, however, be observed that this view of the Calcutta High Court might require reconsideration in view of the decision of the Supreme Court in the case of State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd.  31 S.T.C. 426 (S.C.) We are, however, not concerned with this controversy in this case. In this case, another complication has arisen by the fact that a learned single Judge of this court in the decision in the case of Shew Bhagwan Goenka v. Commercial Tax Officer 77 C.W.N. 1026 has held that Section 2(1a) of the Bengal Finance (Sales Tax) Act, 1941, as amended by the West Bengal Taxation Laws (Amendment) Act, 1969, defining 'business', in so far as it was given retrospective operation, had put an unreasonable restriction on the freedom of trade under Article 19(1)(f) and (g) and was ultra vires the Constitution. It was held further that Section 2(1a), in so far as it was given retrospective operation, also offended Article 20 of the Constitution and was ultra vires. This decision, we are informed, is under appeal, but there has been no stay of operation of this judgment. The question is when there is a clear section which is retrospective in operation by the clear language of the section, but which has been pronounced by the decision of a court to be ultra vires which, of course, is sub judice, whether the court in reference matter is competent to ignore the amending section which has been struck down by the decision as mentioned before, or the court can ignore the decision and proceed upon the terms of the section as amended. This is a question which is not, however, easy of solution. But for the disposal of this reference we have decided only to pose the problem but not to express any opinion on that. We have decided to answer the reference on either view of the matter.
4. The essence of the question is whether the Iron and Steel Controller was carrying on the business of selling goods in respect of the three types of transactions with which we are concerned. If we take the amending Act to be in operation, then it has to be accepted that whether in respect of those transactions profit accrued or not and whether there was profit-motive or not is immaterial. It has, however, to be borne in mind that unlike most of the decisions, which have been referred, the Iron and Steel Controller was not at all a dealer or was not a person who was carrying on any business at all. It is not like Fort Gloster Industries Ltd.  20 S.T.C. 141 or Burmah Shell Distributing Co. Ltd.  31 S.T.C. 426 (S.C.), which were carrying on the business of selling goods of one kind and diversified their activities for certain welfare purposes or to dispose of their surplus materials carried on the operation of sale. It is a case of a statutory authority discharging its obligation pursuant to the direction of the Government in pursuance of a particular project or programme for a particular purpose. If we take the Technical Co-operation Aid Programme, the sales by the Iron and Steel Controller, which he had done were done only to implement the purpose of the project and it was a machinery chosen by the Government to implement the purpose. The purpose was to bring about immediate increase in the food and agricultural production and to import certain iron and steel materials, so that these materials could be put along the proper channels and as contemplated by the agreement they should be under the supervision of the Ministry of Food and Agriculture, and the Iron and Steel Controller was chosen to arrange for the necessary allotment, so that the quantity of approximately the same types of iron and steel imported thereunder could reach the village blacksmiths,, farmers and implements factory for the purpose of the agreement. Therefore, the operation of selling of these goods by the Iron and Steel Controller was not for itself carrying on or engaging in any occupation or avocation but to ensure that the quantity of iron and steel imported under the project could readily reach the village blacksmiths, farmers and implement factories in India as contemplated under the agreement. It was with this object and purpose that the sale of iron and steel had to be organised through a machinery and the Iron and Steel Controller was chosen as the machinery by the Government of India to implement the object. We are concerned in the amended definition with the expression 'trade, commerce or manufacture or anything which was in the nature of trade, commerce or manufacture'. Undoubtedly, these operations were not manufactures. The only question we are faced with is whether they could be called commerce or trade. In a commercial sense any operation which is repetitive in character and which is the chosen occupation or avocation of an individual or an institution can be considered to be trade or commerce if it is organised for profit-motive. But profit-motive is irrelevant in the new definition. But, even under the amended definition to be trade or occupation not only the sales should be in an organised or systematic manner with regular features of trade but selling should be the occupation or avocation where time and energy should be given for that purpose. Here the main purpose was to implement the project, and to ensure that purpose it was the machinery for implementation. It was not to carry on any occupation as such that the Iron and Steel Controller indulged in these sales. In this view of the matter, we are of the opinion that the Iron and Steel Controller was not carrying on the business as a dealer even under the amended definition in respect of the goods sold under the T. C. A. agreement. In this connection we may refer to a decision of this court in the case of Chief Commercial Superintendent, South Eastern Railway v. Member, Board of Revenue, West Bengal  32 S.T.C. 171, where it was held that if no trade, commerce or manufacture or adventure or concern in the nature of trade, commerce or manufacture was carried on in respect of selling goods, then any transaction which was incidental or ancillary to such trade, commerce or manufacture or concern cannot come within the ambit of the definition of 'dealer' in Section 2(c) of the Bengal Finance (Sales Tax) Act, 1941, as amended by the West Bengal Taxation Laws (Amendment) Act, 1969. When a person carried on composite operations, the true character of the essential operation had to be found out. If the essential operation was the business of selling goods, any incidental or ancillary transaction arising as an incident of such sale would also be included in the definition of 'business', but not beyond it. In that case, under Section 56 of the Indian Railways Act, 1890, if goods or animals coming into the possession of a railway for carriage or otherwise were not claimed by the owner, the railway administration was required to serve a notice asking him to remove the goods and upon his failure was to dispose of the goods and hand over the surplus, if any, of the sale proceeds to the person entitled to the same. The question was whether the petitioner, the South Eastern Railway, could be considered as a dealer within the meaning of Section 2(c) of the Act for the purpose of liability to sales tax in respect of the sales conducted by it under the provisions of Section 56 of the Indian Railways Act, 1890. It was held that the function of the railway was to carry passengers for fare and carry goods for freight and the incidental and ancillary powers or authority had been given to it under the Railways Act to discharge these essential functions, and one of such incidental powers was disposal of unclaimed goods. The main function of the petitioner was not carrying on the business of selling goods and, therefore, when the petitioner effected sales of unclaimed and unconnected goods, it was not a dealer within the meaning of Section 2(c) of the Act. It appears that similar kind of performance had to be done under the agreement and, in order to do that the machinery chosen was the Iron and Steel Controller of the Government of India and, therefore, in order to carry out the object, the Controller had to carry on the operation of sale, not as an occupation or avocation of selling goods but as an incidental function in discharge of the allocation of goods under the project.
5. The next types of goods with which we are concerned are the goods for disposal of surplus iron materials. Here again, in this case, the Iron and Steel Controller had not chosen his occupation or trade but had to dispose of iron and steel materials, which were surplus materials, to proper persons as contemplated under the Iron and Steel Control Order.
6. The third types of goods, with which we are concerned, are forms and leaflets. These had to be printed and distributed for the purpose of informing the public the proper price methods to the dealer of iron and steel materials in accordance with the Control Order. In order to discharge again the statutory function, the Iron and Steel Controller had to carry on this operation, not with the object of carrying on the business of selling goods but with the object of making known the purpose, so that the Order might be fully implemented.
7. In the premises, none of these three types of operations of sale, in our opinion, can be considered to come within the mischief of the amended definition. If we proceed on the unamended definition, then, in the facts arid circumstances of this case, and where there was no profit-motive in any of these operations and on the principles of Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue  20 S.T.C. 398 (S.C.) and Indian Iron and Steel Co. Ltd. v. Member, Board of Revenue  27 S.T.C. 373, the Iron and Steel Controller cannot be considered to be a dealer.
8. Before we conclude we must observe that the counsel for the Government tried to point out, with reference to certain contentions raised before the revenue authorities below, that it was not contended below that the Iron and Steel Controller was not a dealer. What was contended was that the dealings were with registered dealers and time was sought to produce the necessary certificates' It is true that time was sought for that purpose. But the nature of sales in respect of these transactions was a controversy before the authorities. In the aforesaid view of the matter, we answer the question referred to this court in the negative and in favour of the petitioner.
9. Each party will pay and bear his own costs.
10. I agree.