1974 (3) TMI 95 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the phrases "goods" and "dealer" under the Punjab General Sales Tax Act and the Central Sales Tax Act.

Analysis:
The judgment of the High Court of Punjab and Haryana dealt with General Sales Tax References Nos. 2 and 3 of 1973 involving an assessee engaged in the sale of magic items and astrology services. The department imposed tax and penalty on the assessee for the assessment year 1962-63 under the Central Sales Tax Act and the Punjab General Sales Tax Act. The assessee contended that he was not a dealer and his main business was astrology, not the sale of goods. The Tribunal observed that the assessee sold cheap toy articles at high prices, claiming magical efficacy due to mantras recited over them. The Tribunal rejected the assessee's stand, leading to the reference to the High Court for the interpretation of whether the supply of charmed articles constituted a sale, making the assessee a dealer under the Central Sales Tax Act.

The High Court referred to a previous judgment of the Bombay High Court in Commissioner of Sales Tax v. Messrs. Habibulla Saheb, which held that charging for spiritual services rendered through charmed items did not amount to a sale of goods. The High Court noted that the assessee was selling spiritual services through material goods, with the price charged not reflecting the value of the goods but the spiritual efficacy. The Court concluded that the assessee was selling his services as a magician or spiritual person, similar to the case before the Bombay High Court. Therefore, the High Court found no distinction between the present case and the Bombay case, ruling in favor of the assessee and against the department.

In conclusion, the High Court answered the questions referred in the negative, supporting the assessee's position. The judgment highlighted that the sale was of spiritual services through material goods, not the goods themselves, leading to a decision in favor of the assessee. The Court emphasized that the price charged was for the spiritual efficacy of the goods, aligning with the interpretation provided in the Bombay High Court's judgment. The reference was answered in the negative, with no order as to costs in any of the references.