1968 (7) TMI 56 - HC - VAT and Sales Tax

Summary

Issues:
- Whether the petitioner is liable to pay sales tax as a "dealer" under the Andhra Pradesh General Sales Tax Act of 1957?
- Whether the business activities of the petitioner in the canteen constitute sales within the meaning of the Sales Tax Act?
- Whether the petitioner can be considered an agent or trustee instead of a dealer for sales tax assessment purposes?

Analysis:
The petitioner, a sole proprietor of a canteen in a hospital compound, challenged an assessment by the Special Additional Commercial Tax Officer for sales tax. The officer concluded that certain credit sales were not accounted for in the petitioner's returns, leading to an estimated turnover assessment. The petitioner argued that he should not be liable for sales tax as he does not fit the definition of a "dealer" and his transactions do not constitute sales. The petitioner contended that the canteen was established with the hospital's permission to supply refreshments exclusively to hospital staff and students at fixed rates. The Superintendent controlled the canteen's operations, including cleanliness and pricing, suggesting no transfer of property through refreshment supply. The petitioner claimed to be engaged in a works contract or acting as an agent or trustee, hence not liable for sales tax.

In response, the court, referring to the Andhra Pradesh General Sales Tax Act of 1957, analyzed the definition of a "dealer" and the term "business." The court emphasized that any activity involving time, attention, and labor for profit constitutes a business. Considering the petitioner's ownership and operation of the canteen for profit, the court determined that he falls within the definition of a "dealer." The court rejected the petitioner's argument of being an agent or trustee, highlighting his status as the canteen's proprietor and the agreement under which he operated the business. The court cited a Supreme Court decision to support its conclusion that the petitioner's transactions are subject to sales tax assessment. Consequently, the court held that the petitioner is indeed a "dealer" and not an agent or trustee as claimed, allowing the assessing officer to levy sales tax on his transactions.

In conclusion, the court dismissed the petitioner's challenge to the assessment, ruling that there was no jurisdictional issue. The petition was dismissed with costs, and the advocate's fee was fixed.