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TMI Blog1971 (2) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Act, 1948, a statutory obligation is imposed on the petitioner-company to run a canteen for its employees as a labour welfare measure. The petitioner-company has been running such a canteen where food and drinks are served only to its employees on a subsidised basis. In Davanagere Cotton Mills Ltd. v. State of Mysore(1), this court held that the Mysore Sales Tax Act, 1948, does not seek to levy sales tax on all sale transactions but only on such transactions as are effected in the course of business and that where the assessee-mills maintained a canteen on a no profit and no loss basis for the benefit of its employees in conformity with the requirements of the Factories Act, 1948, the turnover relating to sales effected in the canteen was not liable to be taxed under the Mysore Sales Tax Act, 1948. In assessments made under the Act, which came into force on 1st October, 1957, the canteen sales were not assessed following the decision in Davanagere Cotton Mills[1957] 8 S.T.C. 793. The Act was amended by Mysore Act No. 9 of 1964 with effect from 1st April, 1964, by which the definition of the word "business" in section 2(1)(f-2) was amended to include "any trade, commerce or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the law, that even after the amendment it is only the sales effected in the course of trade or business that are exigible to tax and that in order to constitute a trade or business, the activity must be a commercial activity and that the sale effected in the course of carrying out a welfare measure enforced under the provisions of the Factories Act is not a sale in the course of trade or business nor can the petitioner-company be said to be a dealer in regard to food and drinks. In support of his contention, the learned counsel relied on the decision of the Madras High Court in Deputy Commissioner of Commercial Taxes v. Thirumagal Mills[1967] 20 S.T.C. 287. and the decision of the Calcutta High Court in Fort Gloster Industries Ltd. v. Member, Board of Revenue, West Bengal[1970] 26 S.T.C. 141. Under the Madras General Sales Tax Act before its amendment by Madras Act No. 15 of 1964, the Madras High Court had held that where a canteen is run for the amelioration of the workmen in a factory it was in no sense a business of selling goods within the meaning of the definition of the word "business" and that the word "business" was used in the Act in the commercial sense, an integral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with the motive to make profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and (ii) any transaction in connection with, or ancillary or incidental to, such trade, commerce, manufacture, adventure or concern." The definition of the word "business" in the West Bengal Act is similar to its definition in Madras Act No. 15 of 1964. The Calcutta High Court agreed with the view of the Madras High Court in Thirumagal Mills case[1967] 20 S.T.C. 287. P.B. Mukharji, Actg. C.J. (as he then was) stated the reasons for the decision thus: "Apart from the authority, we now proceed to give our reasons for the view we are taking on the Bengal amendment which is already quoted elsewhere in the judgment. The amended definition of business under section 2(1a) insists that it must be a trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. That is the first and essential requisite for a business even under that amendment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1963) clause (a) of section 2 of the U.P. Sales Tax Act, 1948, was substituted by a new clause which reads thus: "(aa) business of buying or selling includes such business carried on without the motive of making of profit." The Allahabad High Court held that by the said amendment, the concept of "carrying on business" in the context of the U.P. Sales Tax Act has been fundamentally changed and its earlier decision has been set at naught and that in order to be a dealer, it is no longer necessary that a business of buying or selling must be carried on with a profit-motive. The Act levies tax on the taxable turnover of every dealer. The word "dealer" has been defined in section 2(1)(k) of the Act to mean any person who carries on the business of buying, selling, supplying or distributing goods. The word "sale" has been defined in section 2(1)(t) as meaning every transfer of the property in goods by one person to another in the course of trade or business. The word "business" has been defined in section 2(1)(P2) thus: "'business' includes any trade, commerce or any adventure or concern in the nature of trade or commerce, with or without profit-motive in such trade, commerce, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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