1963 (3) TMI 30 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the sale of foodstuffs by the Carriage Works Canteen, Southern Railway, Perambur, qualifies as a business activity for the purpose of the Madras General Sales Tax Act.
2. Interpretation of the definition of "business" under the Sales Tax Act in the context of profit motive.

Analysis:
The High Court of Madras, in a judgment delivered by Srinivasan, J., addressed the issue of whether the sale of foodstuffs by the Carriage Works Canteen of the Southern Railway constitutes a business activity for the purpose of the Madras General Sales Tax Act. The Sales Tax Appellate Tribunal had held that since the canteen was under a statutory duty to provide foodstuffs to its workers on a non-profit basis, it did not qualify as a "dealer" carrying on business. The Court, after considering relevant precedents, including Integral Coach Factory Canteen v. Deputy Commercial Tax Officer and Soundarapandian and Bros. v. Deputy Commercial Tax Officer, concurred with the Tribunal's view. It emphasized that a business activity should have a profit motive to fall within the scope of the Sales Tax Act's definitions of "dealer" and "sale."

The judgment also delved into the interpretation of the definition of "business" under the Sales Tax Act. The definition includes any trade, commerce, or manufacture, regardless of profit accrual. The State argued that this definition should be construed to exclude the profit motive, thereby encompassing non-profit activities as well. However, the Court rejected this argument, citing previous decisions where it was held that a business conducted without a profit motive does not meet the criteria of a business under the Sales Tax Act. The Court emphasized the need to interpret statutory language as it stands, without inferring legislative intent that is not explicitly stated.

In conclusion, the Court dismissed the petition, upholding the Tribunal's decision that the sale of foodstuffs by the Carriage Works Canteen did not amount to a business activity under the Sales Tax Act. The judgment clarified that a profit motive is essential for an activity to be considered a business within the Act's purview, and the statutory duty to provide foodstuffs on a non-profit basis did not alter this requirement. The petitioner was ordered to bear the costs, including counsel's fee.