1973 (5) TMI 80 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether transactions made by M/s. National Press owned by All Orissa Primary Teachers' Federation are commercial in nature and liable to be taxed under the Orissa Sales Tax Act?
2. Whether the petitioner can be said to be carrying on business within the meaning of section 2(c) of the Orissa Sales Tax Act?

Analysis:

Issue 1:
The case involves determining the commercial nature of transactions by M/s. National Press owned by the All Orissa Primary Teachers' Federation for tax liability under the Orissa Sales Tax Act. The Federation, registered under the Societies Registration Act, aims to support education and unite teachers in Orissa. The assessing officer considered the press liable for tax under the Act based on sales of items like rubber stamps to both members and outsiders. The first appellate authority annulled the assessments, stating the Federation's non-commercial nature. However, the Tribunal reversed this decision, finding the activities commercial and restoring the assessments. The key question was whether the press's activities qualified as business under the Act.

Issue 2:
The definition of "dealer" under section 2(c) of the Act was crucial in determining if the petitioner was carrying on business. The Act requires two elements to establish a dealer: carrying on business and engaging in the purchase, sale, or supply of goods. The term "business" was not explicitly defined in the Act, leading to a debate on its interpretation. Various legal precedents were cited to support contrasting views on whether a profit motive was essential for an activity to be considered business. The Tribunal found the press's activities to be commercial, leading to the conclusion that the petitioner was engaged in business as commonly understood. The court declined to answer the questions referred, as they were deemed factual issues within the Tribunal's jurisdiction.

In conclusion, the judgment focused on interpreting the commercial nature of the press's activities and the definition of "business" under the Orissa Sales Tax Act. The court's decision hinged on whether the press's transactions qualified as business activities, considering the profit motive and commercial character of the operations. The legal analysis delved into key precedents and statutory definitions to determine tax liability under the Act, emphasizing the factual findings of the Tribunal as the basis for the judgment.