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TMI Blog1968 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ety was of the value of Rs. 20,534.11 nPs., while the Society received from its members a sum of Rs. 32,819.61 nPs. for the supply of the ice required for the transport of fish belonging to its members, with the result that there was a surplus of over Rs. 12,000 on the item of ice during the said year. It was the contention of the Society that it is not liable to pay sales tax on its turnover of ice because there was no "sale" of the ice by the Society to its members and also because the Society did not fall within the definition of "dealer" in section 2(11) of the Bombay Sales Tax Act, 1959. The Society, therefore, raised the question by means of an application under section 52 of the said Act, and the Deputy Commissioner of Sales Tax by his order dated 28th January, 1961, held that the Society is a "dealer" in regard to the purchase and supply of ice to its members, that the Society's activity of supply of ice amounted to a sale, and that tax was payable by the Society in respect of the sale, subject to the deduction permissible under section 8(ii) of the said Act in respect of the purchases made from registered dealers. From that decision of the Deputy Commissioner of Sales Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and Sales Tax, Quilon v. Travancore Rubber and Tea Co.[1967] 20 S.T.C. 520 at pp. 527-528., the burden of proving that the assessee was carrying on the activity in question as a business is upon the taxing authorities. In order to make the applicant-Society liable for sales tax in respect of the supply of ice to its members, under section 3 of the Bombay Sales Tax Act, 1959, it is necessary to establish (1) that the applicant-Society is a "dealer" within the terms of section 2(11) of the said Act; (2) that the said activity amounts to a "sale" by the Society to its members; and (3) that the turnover in respect of the supply of ice during the year in question exceeded the taxable limit of Rs. 30,000. There is no dispute that the applicant-Society's taxable turnover in respect of the supply of ice for the year 1959-60 did exceed that figure. As far as the second ingredient mentioned above is concerned, viz., as to whether the supply of ice by the Society to its members amounted to a "sale", in the view that we take in regard to the first ingredient, it is unnecessary to go into the same. We will, therefore, proceed to consider whether the taxing authorities on whom the burden lie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Bombay v. Ahmedabad Education Society[1956] 7 S.T.C. 497 at p. 501. which was a decision of a Division Bench. He has also sought to distinguish the decision of the Nagpur Bench, which took a contrary view in the case of Gondwana Club, Nagpur v. Sales Tax Officer[1958] 9 S.T.C. 450 at p. 452. It is, however, unnecessary for us to go into the observations or the decisions in the said two cases, because in our opinion this twofold argument urged by Mr. R.J. Joshi with regard to the construction of the definition of the term "dealer" in section 2(11) of the Act overlooks the fact that these nice questions of construction do not really arise if, as we hold, the applicants' case falls within the substantive part with which section 2(11) opens the definition of the term "dealer". The opening part of that definition enacts that the term "dealer" means any "person" who carries on the business of buying or selling goods in the State. As a matter of plain language, the term "person" would mean both a natural person as well as a juristic person like the applicant-Society which, being registered under the Bombay Co-operative Societies Act, 1925, is a body corporate. That a juristic per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer to the actual decision in the said case which was in regard to the provisions of the Madras General Sales Tax Act, 1959, but the Supreme Court has, in its judgment in the said case, taken the view that the respondentSociety before it, which was a registered society, was a body corporate capable of holding property and was, therefore, a "person". The term "person" which occurs in the substantive part of the definition of the term "dealer" in section 2(11) of the Bombay Sales Tax Act, with which we are concerned in the present reference, must, therefore, be held to include the applicant-Society which is a juristic person or legal entity and, in that view of the matter, the requirement of carrying on of business which is clearly stated in that part of the definition, must apply in the case of the applicant-Society. That makes it unnecessary for us to consider the interesting question of construction which Mr. R.J. Joshi has raised in regard to the last part of the definition of the term "dealer" in section 2(11) of the Bombay Sales Tax Act, 1959. We hold that, in the case of a society which is a body corporate, it is necessary that the activity in question should be carried on as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikri and Ramaswami, JJ., as follows: "To infer from a course of transactions that it is intended thereby to carry on business, ordinarily there must exist the characteristics of volume, frequency, continuity and system indicating an intention to continue the activity of carrying on the transactions for a profit. But no single test or group of tests is decisive of the intention to carry on a business." Ramaswami, J., then referred to the observations in the Raipur Manufacturing Co.'s case(1), already cited above, to the effect that the mere fact that the sales of the items were frequent and their volume was large did not lead to the presumption that when the goods were acquired there was an intention to carry on business, but the question in every case really was "of intention to carry on business of selling" any particular class of goods. To the same effect are the observations of the Supreme Court in the case of Deputy Commissioner v. Travancore Rubber and Tea Co.[1967] 20 S.T.C. 520 at p. 527. For applying this test laid down by the highest Court, the question which must be posed is, was it the intention of the applicantSociety to carry on the business of selling ice to its memb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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