JUDGMENT A. K. MATHUR, AG. C.J. - This is a sales tax reference at the instance of the assessee. Following question of law has been referred by the Board of Revenue for answer by this Court : "Whether, on the facts and circumstances of the case, the Tribunal was justified in confirming penalty under section 43(1) of the M.P. General Sales Tax Act, 1958 on the grounds of non-inclusion of sales of unserviceable items and purchases on account of canteen, etc., in returns when it was considered by the Tribunal that these points were still debatable and had not been decided one way or the other ?" 2. The assessee is M/s. Bharat Aluminium Company Limited, a public sector undertaking. Assessment period in the present case is April 1, 1975 to March 31, 1976. The public sector undertaking is engaged in the production and sale of aluminium. During the assessment period, certain unserviceable jeep tyres, batteries and building materials, etc., were disposed of at a price of Rs 37,588. Similarly, certain purchases were also made to the tune of Rs. 1,42,952 for the use in canteen. A purchase tax was levied on this amount also, as they were found to be taxable. Similarly, tax was also recovered on the sale of scrap and a penalty of Rs. 8,000 was imposed under section 43(1) of the M.P. General Sales Tax Act, 1958 (for short, "the Act"). Aggrieved against this, the assessee preferred an appeal before the Appellate Deputy Commissioner, Bilaspur and the assessment was upheld. Likewise the penalty was also sustained. Thereafter, a second appeal was preferred by the assessee before the Tribunal, and the Tribunal also affirmed the findings of the Appellate Deputy Commissioner. In these circumstances, the aforesaid question has been referred to this Court for answer. 3. So far as the purchases on account of canteen are concerned, it has been observed in the order passed by the Tribunal that even if the canteen is being used as a welfare measure, whether the purchase or sale of raw material pertaining to such canteen is taxable or not has not been decided. Therefore, reference to this part of the matter is infructuous because the matter is yet to be decided by the authority. 4. Therefore, reference to this part of the matter is infructuous because the matter is yet to be decided by the authority. 4. In the present reference, we are only concerned with regard to the penalty part for sale of unserviceable items and whether these unserviceable items were part of the business of the assessee or not. The definition of "business" has been amended and the amended definition of the "business" under the Act under section 2(bb) reads as under : "2(bb) 'business' includes - (i) any trade, commerce, manufacture or any adventure or concern in the nature of trade, commerce a manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern and irrespective of the volume, frequency, continuity or regularity of such trade, commerce, manufacture, adventure or concern; and (ii) any transaction of sale or purchase of goods in connection with or incidental or ancillary to the trade, commerce, manufacture, adventure or concern referred to in sub-clause (i), that is to say, - (a) goods of the description referred to in sub-section (3) of section 8 of the Central Sales Tax Act, 1956 (No. 74 of 1956), whether or not they are specified in the certificate of registration, if any, of the dealer under the said Act and whether or not they are in their original form or in the form of second hand goods, unserviceable goods, obsolete or discarded goods, mere scrap or waste material; and (b) goods which are obtained as waste products or by-products in the course of manufacture or processing of other goods or mining or generation of or distribution of electricity or any other form of power." This Court in series of decisions has taken the view that even sale of such unserviceable goods will be treated as part of the turnover of the assessee. Goods which are unserviceable and are sold may not be directly involved in the business of the assessee. Learned counsel Shri Shrivastava has submitted that the case of State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. Goods which are unserviceable and are sold may not be directly involved in the business of the assessee. Learned counsel Shri Shrivastava has submitted that the case of State of Tamil Nadu v. Burmah Shell Oil Storage and Distributing Co. of India Ltd. [1973] 31 STC 426 was a case dealing under the Madras General Sales Tax Act and in that certain advertising materials and scrap and canteen sales, etc., were sold by the Burmah Shell Oil Storage Co., which was dealing in the sale of oil only; and in that connection learned counsel invited our attention to the observations of their Lordships of the Supreme Court observed that : "......The assessee being an oil company has to use oil drums, hose pipes, jerry cans, etc., as part of its trading activity and any sale of these unserviceable goods as scrap is a transaction connected with its trade or commerce." Learned counsel therefore submitted that we would have to find out whether the scrap is connected with the business of the company or not. Learned counsel also invited our attention to [1976] 37 STC 423 (SC) (District Controller of Stores v. Assistant Commercial taxation Officer). This was a case of the Northern Railway wherein the Northern Railway sold out certain iron scrap and the question was whether such unserviceable iron scrap could be said to be exigible to sales tax or not. In this case, of course, answer was given in favour of the Revenue. Shri Seth, Government Advocate submitted that the Railways was dealing with iron, therefore, it was connected with business. 5. This Court relying on the case of Burmah Shell Co. Ltd. [1973] 31 STC 426 (SC) has taken the consistent view in its various decisions reported in [1988] 71 STC 101 [FB] (Hukumchand Mills Ltd. v. Commissioner of Sales Tax, M.P.), [1978] 42 STC 279 (Commissioner of Sales Tax v. Project Automobiles) and [1981] 48 STC 45 (Commissioner of Sales Tax, M.P. v. Bhopal Sugar Industries Limited) that any sale which is incidental to the trading activity of the assessee shall be a part of the sale and is exigible to the sales tax. In the case of Commissioner of Sales Tax v. Project Automobiles [1978] 42 STC 279 (MP) the assessee was distributor of the Ambassador cars and was registered dealer in automobiles and their accessories. In the case of Commissioner of Sales Tax v. Project Automobiles [1978] 42 STC 279 (MP) the assessee was distributor of the Ambassador cars and was registered dealer in automobiles and their accessories. He purchased a car for his office use which was subsequently sold and question arose as to whether the price of the car could be included in the turnover of the assessee. The question was answered with reference to the definition of "business" as defined in section 2(bb) in favour of the department and against the assessee. Likewise, in the case of Commissioner of Sales Tax, M.P., Indore v. Bhopal Sugar Industries Limited [1981] 48 STC 45 (MP) also, the assessee was manufacturer of sugar and certain scraps were sold and certain jeep, cars and trucks were also sold after they ceased to be useful. It was held that sales of these vehicles are necessarily sales incidental to the business of the assessee and their cost would be included in the taxable turnover and liable to be taxed. Similarly in another case where the assessee was running a textile mill and certain scraps were sold like second hand car, it was held that cost will be included in the taxable turnover and exigible to tax. The Full Bench of this Court in the case of Hukumchand Mills Ltd. [1988] 71 STC 101 wherein the assessee was manufacturer of cloth and yarn, certain discarded assets such as scraps, dyes, chemicals, obsolete machinery, coal, ash, etc., and other materials were sold, levy of tax was uphold and it was held that scrap is also taxable for sales tax. Thus, it was the consistent view of this Court that any material which is connected with or incidental to the business shall be liable to be taxed. Hence the cost of scraps sold by the assessee would be included in the turnover and is exigible to the tax. Therefore the reference is answered in favour of Revenue and against the assessee. 6. But the another question which Shri Shrivastava, learned counsel submitted is that whether the act on the part of the assessee was bona fide and he has no mens rea. It was pointed out that the Board has observed that this question is debatable one and, learned counsel has invited our attention to Cement Marketing Co. 6. But the another question which Shri Shrivastava, learned counsel submitted is that whether the act on the part of the assessee was bona fide and he has no mens rea. It was pointed out that the Board has observed that this question is debatable one and, learned counsel has invited our attention to Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 45 STC 197 wherein their Lordships of Supreme Court held, while dealing with section 43 of the M.P. General Sales Tax Act, 1958 that it is true that section 43 provides for imposition of penalty unless the assessee while filing inaccurate return is accompanied by a guilty mind, the section cannot be invoked for imposing penalty. Learned counsel submitted that this was a moot question whether such type of scraps which has nothing to do with the manufacture of aluminium by the assessee could be treated to be included in the taxable turnover of the assessee or not. It is true that this was of course not free from doubt and Board has also expressed its reservation; therefore, we cannot infer a guilty mind on the part of the assessee, a public sector undertaking. Looking to the peculiar facts and circumstances of the case and specially with reference to their Lordships' observation in [1980] 45 STC 197 (SC) (Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax), we are of the opinion that levy of penalty in the peculiar circumstances of this case is not justified. Though we hold that the scraps which have been sold by the assessee is includible in the taxable turnover, but in the peculiar facts and circumstances of the case and specially when the assessee is a public sector undertaking, levy of penalty is not warranted. Reference is accordingly answered. Reference answered accordingly.