2003 (1) TMI 667 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the petitioner's society is providing a service or acting as a dealer.
2. Whether the transactions amount to the sale of goods or are merely service provisions.

Issue-wise Detailed Analysis:

1. Whether the petitioner's society is providing a service or acting as a dealer:

The petitioner, a co-operative society, argued that it was providing a service by managing the canteen for Bongaigaon Refinery & Petrochemicals Limited (BRPL) and thus should not be considered a dealer liable for sales tax. However, the court noted that the society was registered under the Assam General Sales Tax Act, 1993, and purchased raw materials to prepare meals, snacks, etc., which were sold to employees and other staff. The court referenced the definition of "business" under section 2(5) of the Act, which includes any trade, commerce, or manufacture, regardless of profit motive. The court concluded that the society was engaged in business activities and therefore acted as a dealer.

2. Whether the transactions amount to the sale of goods or are merely service provisions:

The petitioner contended that the transactions did not amount to the sale of goods but were mere service provisions. The court examined the nature of the transactions, noting that the society supplied meals to BRPL employees and other staff against payment, with prices fixed by BRPL. The court referenced several judgments, including the Madhya Pradesh High Court's decision in Commissioner of Sales Tax, Madhya Pradesh v. Hukumchand Mills Ltd. and the Supreme Court's decision in State of Tamil Nadu v. Board of Trustees of the Port of Madras, which established that transactions involving the sale of goods, even if connected to a service, could be taxed. The court found that the society sold meals to BRPL against payment, making the transactions taxable sales.

Conclusion:

The court dismissed the writ petition, holding that the petitioner's society was engaged in the business of preparing and supplying meals and thus liable to pay sales tax. The court emphasized that the purpose for which the meals were procured was irrelevant for interpreting the taxing statute. The society was given six weeks to make the payment against the tax demand along with interest as per law.