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TMI Blog2013 (4) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... cal Self Governments. It is unthinkable and beyond imagination to treat the imparting of education as business. The relationship in between teacher and one taught is not a business relation. The idea and purpose of imparting education is to develop personality of the students to carry the nation forward and in right direction. Considering the case of Commissioner Of Sales Tax Versus Sai Publication Fund [2002 (3) TMI 45 - SUPREME Court] if the main activity is "non-business" and activity of buying and selling which forms part of an integral part of the non-business activity then also the party will not be a dealer. Thus the petitioner is not a dealer within the meaning of section 2(h) & its activity of printing and selling of admission forms to the students does not amount to business within the meaning of section 2(e) of the Act. In the result, the writ petition succeeds - In favour of assessee. - Writ Tax No.-1691 of 2011 - - - Dated:- 2-4-2013 - Prakash Krishna And Ram Surat Ram (Maurya),JJ. For the Petitioner : Ajit Kumar Singh, Ravi Kant For the Respondent : C. S. C. Prakash Krishna And Ram Surat Ram (Maurya),JJ. JUDGMENT (Delivered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not find mention in the Statute, as one of its object. The contention of the petitioner in simple terms indeed is that it is imparting education which does not by any stretch of imagination amounts to business as it is commonly understood. The imparting of education does not mean dealing, trading or manufacturing 'goods'. The U.P. VAT Act has been enacted for levy and collection of tax on sale or purchase of goods in the State of Uttar Pradesh and for the matters connected therewith and incidental thereto. Earlier, printing materials were not exigible to VAT Act. Schedule-II of the U.P. VAT Act was amended and Entry No.100 was added which provides taxability of printing material, including diary and calendar vide notification dated 24th of December, 2007. Submission is that action of the respondents calling upon the petitioner to produce account books with regard to the printing and sale of test forms or initiation of proceedings under the said Act, is wholly without jurisdiction and uncalled for. Hence, the present writ petition. The respondents in their counter affidavit have not controverted the material allegations as contained in the petition with regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny or a body corporate, the principal office or headquarter whereof is situated outside the State, having a branch or office in the State; vii. any person who carries on the business of transfer of the right to use any goods for any purpose; viii. railway container contractor, transporter or any other carrier or a forwarding agent of goods; ix. an owner or person-in-charge of a godown or warehouse who stores commercial goods. x. a factor, broker, arhati, commission agent, del credere agent, or any other mercantile agent; xi. an auctioneer who carries on the business of selling or auctioning goods belonging to any principal; xii. Government; xiii. any person who acts within the State as an agent of a dealer residing outside the State; xiv. a firm or a company or a body corporate, the principal office or headquarters whereof is situated outside the State, having a branch or office in the State; xv. any person who carries on the business of transfer of the right to use any goods for any purpose; xvi. railway container contractor, transporter or any other carrier or a forwarding agent of goods; xvii. an owner or person-in-charge of a godown or warehouse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and selling. Education in its true aspect is more a mission and a vocation rather than a profession or trade or business, however wide may be the connotation of the two letter words under the Sales Tax Act. In paragraph-8 of The Delhi University Justice Gajendragadkar proceeded to observe: It is true that like all educational institutions the University of Delhi employs subordinate staff and this subordinate staff does the work assigned to it; but in the main scheme of imparting education, this subordinate staff plays such a minor, subordinate and insignificant part that it would be unreasonable to allow this work to lend its industrial colour to the principal activity of the University which is imparting education. After the above quotation, the Court has held as follows:- 54. The learned counsel for the petitioner argues, and in my opinion not without force, that the activity of providing meals to its residential students is such a minor, subordinate and insignificant part that it would be unreasonable to allow this work to lend a business colour to the University so as to make it an institution carrying on the business of buying and selling. The Supreme Court fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed and was selling books, booklets, pamphlets,photos, stickers and other publications containing the massage of Saibaba. A dispute arose as to whether the turnover of such publication can be assessed to sales tax under the Bombay Sales Tax Act, 1959. The Apex Court examined the scheme of that Act, definitions of 'business', 'dealer' and 'person' as also the incidents of tax therein. The terms business and dealer were also as here similarly very widely worded there. The definition of business did not include profit motive as an essential condition for business. For the sake of convenience, the definitions of business , Dealer and person which were up for consideration, are reproduced below:- S.2(5A)- Business includes any trade, commerce or manufacture 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 a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern and any transaction in connection with, or incidental or ancillary to, the commencement or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be carrying on business in respect of transaction incidental or ancillary thereto. We have stated above that the main and dominant activity of the Trust in furtherance of its object is to spread message. Hence, such activity does not amount to business . Publication for the purpose of spreading message is incidental to the main activity which the Trust does not carry as business. In this view, the activity of the Trust in bringing out publications and selling them at cost price to spread message of Saibaba does not make it a dealer under Section 2(11) of the Act. Emphasis has been laid on the main activity of the person to fall within the definition of business. This has been clarified further by adding that the inclusion of incidental or ancillary activity in the definition of business presupposes the existence of trade, commerce etc.. A person to become a dealer, must carry on the business and, then only, he may also be deemed to be carrying on the business in respect of a transaction incidental or ancillary therefor. Reverting to the definition of dealer as contained in the U.P. VAT Act, means who carries on whether regular or otherwise the business of buyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from making special provisions for admission of students belong to 1[the Scheduled Castes, the Scheduled Tribes or Other Backward Classes of citizens]. 7. Powers and duties of the University.-- The University shall have the following powers and duties, namely-- (1) to provide for instruction in such branches of learning as the University may think fit, and to make provision for research and for the advancement and dissemination of knowledge; (2) to admit any college to the privileges of affiliation or recognition or to enlarge the privileges of any college already affiliated or recognised, as the case may be, or to withdraw or curtail any such privilege and to guide and control the work of affiliated and associated colleges; (3) to institute degrees, diplomas and other academic distinctions; (4) to hold examinations for, and to grant and confer degrees, diplomas and other academic distinctions to and on persons, who-- (a) have pursued a course of study in the University, a constituent college or an affiliated college, or associated college; or (b) have carried on research in the University or in any institution recognized in that behalf by the University ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of admission in any course of study in University, Institute, constituent College, affiliated College or associated College for the students belonging to the Scheduled Castes, Scheduled Tribes and Other Backward Classes of citizens may be made and regulated by such orders as the State Government may, by notification, make in that behalf: Provided that reservation under this clause shall not exceed fifty per cent of the total number of seats in any course of study : Provided further that reservation under this clause shall not apply in the case of an institution established and administered by minorities referred in Clause (1) of Article 30 of the Constitution : Provided also that the reservation under this clause shall not apply the category of Other Backward Classes of citizen specified in Schedule II to the Uttar Pradesh Public Services (Reservation for Scheduled Castes, Scheduled Tribes and Other Backward Classes) Act, 1994-- (b) admission to the medical and engineering colleges and to course of instruction for degrees in education and Ayurvedic or Unani systems of medicine (including the number of students to be admitted) shall subject to Clause (a), be regulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that the main activity of the petitioner is imparting education and is not business and supply of food stuff to the residential students which is incidental would not amount to business since the main activity of the petitioner could not be treated as a commerce or business. The relevant paragraph-33 is reproduced below:- 33. In the light of the aforesaid, the main activity of the petitioner is imparting education and is not business. Any transaction, namely, supply of food stuff to its residential students which is incidental would not amount to 'business' since the main activity of the petitioner could not be treated as a commerce or a business. The incidental activity of supplying food stuff would not come within the meaning of the word 'business' as defined under Section 2(6) of the Act. Consequently, since no business is being carried out and there is no sale, the petitioner would not come within the meaning of the word 'dealer' as defined under the Act. We see no reason to differ with the aforesaid proposition of law, which is based on correct reading of various judicial pronouncements of the Apex Court. The case on hand stands on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , of transactions effected by the person in the course of his activity. In actual practice, the profit motive may be easily discernible in some transactions : in others it would have to be in- ferred from a review of the circumstances attendant upon the transaction. For instance, where a person who purchases a commodity in bulk and sells it in retail it may be readily inferred that he has a profit motive in entering into the series of transactions of purchase and sale. A similar inference may be raised where a person manufactures finished goods from raw materials belonging to him or purchased by him, and sells them. But where a person comes to own in the course of his business of manufacturing or selling a commodity, some other commodity which is not a by-product or a subsidiary product of that business and he sells that commodity, cogent evidence that he has intention to carry on business of selling that commodity would be required. Where a person in the course of carrying on a business is required to dispose of what may be called his fixed assets or his discarded goods acquired in the course of the business, an inference that he desired to carry on the business of selling his mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dents supports the view which we have taken in the earlier part of this judgment. The test appears to be is -- to have the intention to carry on the business i.e. selling the admission forms in question. In this case, the petitioner was textile mill itself and therefore, the question of main activity as to whether it amounts to business or not was not in issue. Then, reliance was placed on New Delhi Municipal Committee Vs. State of Punjab, AIR 1997 SC 2847 (part of paragraph-15 in particular). The relevant portion of the said paragraph reads as under:- We may pause here a while and explain why we are attaching such restricted meaning to the words trade or business in the proviso to Section 155 and in clause (2) of Article 289. Both the word import substantially the same idea though, ordinarily speaking, the expression business appears to be wider in its content. The expression, however, has no definite meaning; its meaning varies with the context and several other factors. See Board of Revenue v. A.M. Ansari [1976 (3) S.C.C.512] and State of Gujarat v. Raipur Manufacturing Company [1967 (1) S.C.R.618]. As observed by Lord Diplock in Town Investments Limited v. Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing and business operations carried on by the Provincial governments did not either define the said expressions or specify which trading or business operations are subject to taxation. On this account. the proviso was not and could not be said to have been, ineffective or unenforceable. It was effective till January 26, 1950. Clause (2) of Article 289 also similarly does not define or specify - nor does it require that the law made thereunder should so define or specify. It cannot be said that unless the law made under and with reference to clause (2) specifies the particular trading or business operations to be taxed, it would not be a law within the meaning of clause (2). Coming back to the language of clause (2), a question is raised, why does the proviso speak of taxation in respect of trade or business when the main limb of sub-section (1) speaks only of taxes in respect of lands or buildings and income? Is the ambit of proviso wider than the main limb? Is it an independent provision of a substantive nature notwithstanding the label given to it as a proviso? Or is it only an exception? It is asked. We are, however, of the considered opinion that it is more important to give ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g besides the point. The issue was whether the sale of surplus copies of newspapers by weight as waste is sale of newspaper or not. Sale of newspaper is exempt from the Sales Tax. The question arose whether unsold surplus copies of newspapers disposed of by weight as waste paper amounts to as sale of newspapers or something else. In that connection, the following observations were made:- It is also clear from the material on the record that the transactions of sale of the surplus copies must be regarded as a business carried on by the appellant. It was an activity which he pursued regularly, and the motive was to earn a profit. It was incidental to the business carried on by the appellant of printing and publishing newspapers. In the course of carrying on the business of printing and publishing newspapers, it is inevitable that a number of copies should remain surplus and that they should, therefore, be sold as waste paper. The business of selling the surplus copies as waste paper attracted sale tax, having regard to the terms of clause (d) of section 2 of the Act, which defines the expression business , as it stood at the relevant time. In our opinion, the High Court is pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts etc. are not required by it. As a prudent business organisation the said items, which were obviously used or intended for use in its business, are sold when there is no requirement for them. We find it difficult to accept that such sales cannot even be regarded as occasional sales of a business nature which would make the respondent a casual dealer within the meaning of that expression occurring in Section 2[bb] of the said Act. In the case of State of Tamil Nadu Vs. Burmah Shell Oil Storage and Distributing Co. of India Ltd. and Anr. [ (1973) 31 STC 426 ] this Court was concerned, inter alia, with the sale of scrap where the definition of the word business in the Madras General Sales Tax Act had done away with motive for making profit as being a relevant consideration in determining whether the assessee carried on business or not. Section 2(d) of the Madras Act was similar to the present definition in Section 2(b) of the Orissa Act and it included, the words whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Imparting education is a mission. Right to education, in the context of Articles 45, 41 means (a) every child/citizen of this country has a right to free education until he completes the age of fourteen years; and (b) if a child or citizen completes the age of 14 years the State shall make effective provision or securing the right to work and education within the limits of its economic capacity and development. In the Unni Krishnan, J.P. And Ors. Etc. Vs. Andhra Pradesh, (1993) 1 SCC 645, the Apex Court has laid down that a true democracy is one where education is universal, where people understand what is good for them and the nation and know how to govern themselves. In ancient time, there were Gurukul Ashrams to impart education. An old Sanskrit adage states: That is Education which leads to liberation liberation from ignorance which shrouds the mind; liberation from superstition which paralyses effort, liberation from prejudices which bring the Vision of the Truth . The aims of education has been recognized by the Indian Courts from time to time. Education is perhaps most important function of State and Local Self Governments. It is unthinkable and beyond imagination to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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