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TMI Blog1968 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... r are liable to tax under the Bombay Sales Tax Act, 1959? The short facts which have given rise to these two questions are as under: The opponent, namely, Shri Surat Panjarapole is a public charitable institution which was founded in or about 1796 A.D. with the object of keeping and preserving the lives of stray dogs, stray cattle and other stray animals. In 1950, the trustees had entered into an agreement with the Government of Bombay for breeding pedigree cattle. Even after the scheme was abandoned by the Government of Bombay, the opponent continued to maintain the pedigree cattle farm. The Panjarapole had applied for registration under the Bombay Sales Tax Act, 1953, and a registration certificate was issued to it and from the year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the two Acts subject to the same reservation. The Tribunal has thereafter made the reference stating the aforesaid two questions under both the Acts in identical terms. Under section 2(6) of the Act of 1953 a "dealer" is defined as any person who carries on the business of selling or buying goods in the pre-reorganisation State of Bombay, excluding the transferred territories, whether for commission, remuneration or otherwise...The exception provides that an agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally shall not be deemed to be a dealer within the meaning of this clause. Similarly, under the Act of 1959, section 2(11) defines a dealer to mean any person who whether for commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit-motive, and not for sport or pleasure. By the use of the expression "profit-motive", their Lordships clarified at page 6 that it was not intended that profit must in fact be earned. It predicates a motive which pervades the whole series of transactions effected by the person in the course of his activity. At page 7 their Lordships pointed out that the question is one of intention to carry on business of selling any particular class of goods. Undoubtedly, from the frequency, volume, continuity and regularity of transactions carried on with a profit-motive, an inference that it was intended to carry on business in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supplies and Disposals carried on a business of selling goods and was a dealer. The majority view of Sikri and Ramaswami, JJ., was that the Director was not carrying on the business of buying or selling goods. He was not selling surplus goods for profit but he was merely disposing of the surplus material by way of realisation and the transactions were, therefore, not taxable as sales under the Act. At page 405 in the majority decision it was pointed out that to regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit-motive; there must be some real and systematic or organised course of activity or conduct with a set purpose of making profit. To infer from a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the institution. These animals are brought and kept in the institution to save their lives out of the charitable motive underlying this institution. When these animals die their carcasses have got to be disposed of. Milk from these animals is sold but that does not make it a business activity. The learned Advocate-General emphasised the aspect that this institution had at some stage worked under the Government scheme of breeding pedigree cattle which was subsequently abandoned and still pedigree cattle were continued. Even if the pedigree cattle have been continued in this institution, it cannot be said that the essential character of the activity of this institution which consists of preservation of lives of these voiceless animals has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is one of maintaining animals to save the lives of these voiceless animals and it does not carry on any business activity with any profitmotive and merely because incidental sales are done of the animal products, it could not be considered as carrying on business of selling these goods. In the result the answer to the questions referred to us are as under: As regards question (1) our answer to the first part is in the negative, i.e., the opponent-institution is not a dealer. The second part of the first question, therefore, does not arise for our consideration. As regards the second question our answer is in the negative, i.e., that such sales are not liable to tax under either of the two Acts. We dispose of this reference according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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