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TMI Blog1976 (10) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are run by self-governing bodies like panchayats, panchayat samities, zila parishads and municipalities. It does not deal with private hospitals and individuals. It is further averred that the organisation is working as a public utility service on "no-profit-no-loss" basis. The medical stores and the hospital equipments are purchased by the depot and supplied to the hospitals and medical institutions mentioned above after adding service charges of 10 per cent on the cost of indented stores. In the year 1956-57, a question arose whether the activities of the depot had brought it within the mischief of the term "dealer" as defined in section 2(d) of the Punjab General Sales Tax Act, 1948, or not. After a great deal of scrutiny and discussion, it was ultimately ruled by the excise and taxation authorities of the erstwhile State of Punjab that the depot was not a "dealer" in the ordinary course of business of sale and purchase which necessarily implies a profit-motive. It was, therefore, ruled that the depot need not be registered under the said Act. The communication dated 15th July, 1957, addressed by the then Excise and Taxation Commissioner, Punjab, is attached as annexure C t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Act. The tax liability, including the penalties imposed for the two years, are as under: 1964-65 Issued under Punjab Issued under Central General Sales Tax Sales Tax Act. Act. Rs. Rs. A. Taxable turnover determined 94,20,000 62,20,000 B. (i) Tax assessed 5,65,200 6,28,000 (ii) Penalty imposed 1,00,000 ... Total of B(i) B(ii) 6,65,200 6,28,000 Less amount paid already ... ... Net amount due: 6,65,200 6,28,000 1965-66 A. Taxable turnover determined 94,01,626.80 62,67,750.51 B. (i) Tax assessed 5,64,097.62 6,26,775.06 (ii) Penalty imposed 1,00,000.00 ... Total of B(i) B(ii) 6,64,097.62 6,26,775.06 Less amount paid already ... ... Net amount due: 6,64,097.62 6,26,775.06 These orders are being challenged in Civil Writ No. 1183 of 1970 on the grounds that the petitioner was not a dealer, the property of the Central Government could not be taxed under a State law as laid down in article 285 of the Constitution, the imposition of penalty was illegal, and the petitioner should be allowed to claim exemptions in respect of sales made to institutions lying outside the territories of Haryana. The assessment orders passed and the penalties imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context,- (c) 'dealer' means any person including a department of Government who in the normal course of trade, whether with or without a profit-motive, directly or otherwise, whether for cash, deferred payment, commission, remuneration or other valuable consideration, purchases, sells, supplies or distributes any goods in the State, or imports into or exports out of the State, any goods, irrespective of the fact that the main place of business of such person is outside the State and where the main place of business of such person is not in the State, includes the local manager or agent of such person in the State in respect of such business.......... (iv) 'trade' includes any transaction, casual or otherwise, of purchasing, selling, supplying, distributing, importing, exporting or manufacturing any goods in connection with, or incidental or ancillary to, such trade........... " In Enfield India Ltd. Co-operative Canteen Ltd. case', it was held by the Supreme Court that even when a co-operative society supplies refreshments to its members for a price paid or promised, it results in transfer of property in the refreshments. It has been vehmently argued by Mr. Awasthy, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar grounds. On the other hand, in Government Medical Store Depot v. Superintendent of Taxes, Gauhati1974 Tax. L.R. 1628., it was held by a Division Bench of the Gauhati High Court with regard to this very depot that it fell within the meaning of the word "dealer" as defined in section 2(b) of the Central Sales Tax Act, 1956. Speaking for the Bench, P.K. Goswami, C.J., observed as under: "When the Government of India has decided to establish a Government Depot for selling medicines, drugs and other medical stores, at cost price plus 10 per cent towards administrative expenses in order that there will be no profit but certainly that there is no loss, it cannot be said that the petitioner is not carrying on a normal trading activity. Another test will be whether if another person has done the same thing in the same way, he would be held to be carrying on business or not. It is difficult to hold to the contrary. As the Supreme Court observed, the question is of intention to carry on business of selling the goods and 'it is not intended that profit must in fact be earned'. It is difficult to hold that the Government of India in this case is absolutely regardless of the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it carries on trade or business in essential commodities because it has the power to do so and because it is obligated to ensure even distribution of vital goods for the needy sections of the people. We see no difficulty in inferring that the systematic activity of buying foodgrains and fertilisers and selling them by the State, although in fulfilment of a beneficent national policy is nevertheless trade or business. Necessarily, government becomes a 'dealer' by definition and carries on 'business' within the meaning of the Central Act and the State Act (omitting for a moment the distinction in the two definitions based upon the motive to make gain or profit). The conclusion, therefore, is inevitable that the appellant, representing the Central Government, is rightly held to be the assessee." The aforementioned observations apply with full vigour to the instant case and we have no hesitation in holding that the petitionerdepot was a "dealer" within section 2(b) of the Central Sales Tax Act and also under section 2(d) of the Act. It is no doubt true that article 285 of the Constitution lays down that the property of the Union of India shall be exempt from all taxes imposed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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