{"id":8795,"date":"2026-04-23T10:47:37","date_gmt":"2026-04-23T05:17:37","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8795"},"modified":"2026-04-23T10:47:37","modified_gmt":"2026-04-23T05:17:37","slug":"scrap-sales-taxable-amendment-sc-ruling","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/scrap-sales-taxable-amendment-sc-ruling","title":{"rendered":"Scrap Sales Taxable Post-1964 Amendment | SC Ruling"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/excise-service-tax\/101010000000418064\/scrap-sales-not-taxable-pre-1-9-1964-post-amendment-taxable-as-business-incidental-turnover-sc\">State of Tamil Nadu vs. Burmah Shell Oil Storage &amp; Distributing Co. of India Ltd. (2026) 41 Centax 49 (S.C.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>Jaganmohan Reddy, K.S. Hegde<\/strong> &amp; <strong>Hans Raj Khanna,<\/strong> JJ.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The respondent-assessee, being oil companies, periodically sold unserviceable oil drums, hose pipes, jerry cans, rims, unserviceable pipe fittings and old furniture as scrap. Fact-finding recorded that such scrap arose from and related to trading operations. The High Court, following its earlier judgment, held that the sale of scrap was not liable to tax. The matter involved the determination of tax liability for the sale of scrap before and after the amendment made in 1964 to the definition of business under section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, whereby transactions incidental or connected with business were included. The matter was placed before the Hon\u2019ble Supreme Court.<\/p>\n<h2><em>Supreme Court Held<\/em><\/h2>\n<p>The Hon\u2019ble Supreme Court held that under the law prior to the amendment in 1964, sale of scrap did not necessarily lead to an inference that business was intended to be carried on in those goods. It was observed that discarded goods were not treated as by-products or subsidiary products, and their disposal could not be regarded as part of or incidental to the main business, and such turnover was not liable to tax. It was further held that after the amendment, the definition of business included transactions incidental or connected with trade, manufacture or concern irrespective of profit motive. The Court held that the sale of unserviceable drums, hose pipes and other scrap was connected with the business of the assessee and formed part of the taxable turnover. Accordingly, the appeals filed by the department were partly allowed for the later period and dismissed for the earlier period.<\/p>\n<h2><em>List of Cases Reviewed<\/em><\/h2>\n<ul>\n<li>Burmah Shell Oil Storage and Distributing Company of India Limited v. State of Madras \u2014 Tax Case Nos. 108 and 110 of 1967, decided on 2-8-1967 by Madras High Court \u2014 Partly affirmed [Para 10]<\/li>\n<\/ul>\n<h2><em>List of Cases Cited<\/em><\/h2>\n<ul>\n<li>A.P. State Road Transport Corpn. v. Commercial Tax Officer \u2014 27 S. T. C. 42. \u2014 Distinguished [Para 6]<\/li>\n<li>Deputy Commissioner v. Sri Thiromagal Mills Limited \u2014 20 S. T. C. 287 \u2014 Disapproved [Paras 4, 5]<\/li>\n<li>Hyderabad Asbestos Cement Products Ltd. v. State of Andhra Pradesh \u2014 30 S. T. C. 26 \u2014 Approved [Para 5]<\/li>\n<li>State of Gujarat v. Raipur Manufacturing Co. Ltd. \u2014 19 S.T.C. 1 \u2014 Relied on [Paras 3, 6]<\/li>\n<li>State of Madras v. Javaraj, Nadar &amp; Sons \u2014 28 S.T.C. 700 \u2014 Noted [Para 3]<\/li>\n<li>State of Tamil Nadu v . Thirumagal Mills Ltd. \u2014 29 S.T.C. 290 \u2014 Relied on [Para 3]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: State of Tamil Nadu vs. Burmah Shell Oil Storage &amp;&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8808,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,51,63],"tags":[],"class_list":["post-8795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-excise-service-tax","category-news-excise-service-tax","category-est-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Scrap Sales Taxable Post-1964 Amendment | SC Ruling<\/title>\n<meta name=\"description\" content=\"SC rules scrap sales not taxable pre-1964 but taxable post amendment as incidental business turnover under TNGST Act.\" \/>\n<meta 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