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TMI Blog1995 (2) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... other publications containing the message of Saibaba and the turnover of such publications can be assessed to sales tax under the Bombay Sales Tax Act, 1959 ("the Act"). The material facts giving rise to this controversy are as follows: The assessee is a trust created by four devotees of Saibaba of Shirdi by a deed of trust dated August 6, 1984. The object of the trust is to spread the message of Saibaba of Shirdi. For the advancement of the above object, the trust publishes books, booklets and other literature containing the message of Saibaba and photos, stickers, etc. All these are published by the trust under the aegis of "Sai Publications" and made available to the devotees of Saibaba on a nominal charge to meet the cost. The amount realised from the sale of such publications goes to the trust and forms part of the property of the trust and can be utilised only for furtherance of the objects of the trust. The trust deed contains a specific provision to the effect that in the event of failure of the trust to carry on its aims and objects, the fund remaining in its hands would be handed over to the Sansthan of Shirdi. To avoid any controversy in regard to leviability of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a conclusion that keeping in view the object of the trust and the nature of its activities, the assessee could not be held to be a dealer and hence no tax can be levied on the amount received by it from the sale of its publications. Hence this reference at the instance of the Revenue. 3.. Mr. R.V. Desai, learned counsel for the Revenue, submits that the trust in question is a dealer within the meaning of section 2(11) of the Act read with section 2(5A) thereof, as it sells the books published by it for a price. According to him, after the amendment of the definition of "business" with effect from August 16, 1985, it is immaterial whether the above activity was carried on by the trust with a profit-motive or without any profit-motive. The submission of Mr. Desai in other words is that the object for which the books, etc., are published and sold by the trust is not relevant for deciding whether the trust carried on the business of sale or supply of books. The fact that it publishes the same for sale by itself is sufficient to make it a dealer in those publications. Reliance is placed in support of the above contention on the decisions of the Supreme Court in State of Gujarat v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, means not only natural persons but includes any company or association or body of individuals whether incorporated or not and also a Hindu undivided family, a firm or a local authority. "Dealer" on the other hand, means only such persons who carry on the business of buying and selling of goods in the State including those who are deemed to be dealer by virtue of the definition of "dealer" contained in section 2(11) of the Act. It is thus clear from a conjoint reading of section 3 and clauses (11) and (5A) of section 2 of the Act that tax under this Act is leviable not on the sales or purchase of taxable goods by any and every "person", but only "by person who can be held to be dealer within the meaning of clause (11) of section 2 of the Act". 7.. The expression "business" appearing in the definition of "dealer" in section 2(11) of the Act is an extensively used expression. It connotes some real, substantive and systematic or organised course of activity or conduct with a set purpose. The true meaning of this expression in the context of the definition of "dealer" in the sales tax statutes of different States has always been a subjectmatter of serious debates in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginally inserted by Maharashtra Act No. 62 of 1974, reads as follows: "(5A) 'business' includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture and any transaction in connection with, or incidental or ancillary to such trade, commerce, manufacture, adventure or concern." The following was added in the above definition by the Maharashtra Tax Laws (Levy and Amendment) Act, 1988 (Maharashtra Act No. 9 of 1988) with retrospective effect from July 1, 1981: "and any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern;" At the end of the above clause, the following Explanation was also added from July 1, 1981, by the same Amendment Act: "Explanation.----For the purpose of this clause, the activities of raising of man-made forests or rearing of seedlings or plants shall be deemed to be business;" In the present reference we are not concerned with the above Explanation. This definition was further amended by the Maharashtra Tax Laws (Levy, Amendment and Repeal Act), 1989 (Maharashtra Act No. 9 of 1989) and the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld fall within the definition of business or not. The last amendment made by Maharashtra Act No. 9 of 1989 with effect from August 16, 1985, appears to be intended to get over the decisions of the Supreme Court where it was held that in the absence of profit-motive, transactions though satisfying the requirements of volume, frequency, continuity and regularity of transactions, would not constitute business so as to make the person carrying on such transactions a dealer. 9.. Though, as a result of the above definition, many of the activities which would not have been regarded as "business" by reason of absence of some of the essential ingredients of business, like profit-motive, etc., would fall within the expression "business", the activity must still be one which, in ordinary connotation, is regarded as business. The object of the definition of "business" and the amendments made therein from time to time are merely to see that business activities are regarded as "business" despite the absence of some of the elements which are normally associated with business, trade or commerce, such as profit-motive. It cannot, however, be construed to mean that a person would be a dealer mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessees carried on the business of tanning hides and skins and selling the tanned hides and skins. They were also registered as dealer under the Hyderabad General Sales Tax Act, 1950, in respect of the above business. The controversy arose only in regard to levy of tax on the price paid for buying tanning bark which was required in their tannery. The assessees disputed the levy of tax on the same. The case of the assessee was that tanning bark was bought for consumption in the tannery and not for sale, and they were accordingly not dealers in tanning bark and therefore the price paid for buying tanning bark was not liable to duty. This contention was rejected by the taxing authorities. But the High Court of Andhra Pradesh accepted the contention of the assessee and modified the order of the taxing authorities. On appeal, the Supreme Court reversed the decision of the High Court and held that it could not be said that tanning bark was bought by the assesseedealer for any purpose unconnected with the business carried on by them, viz., manufacture and sale of the dressed hides and skins. It was further held that the consumption in the business therefore did not exclude the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the assessee. In Government Medical Store Depot v. Superintendent of Taxes [1985] 60 STC 296, the controversy before the Supreme Court was whether profit-motive was relevant in deciding whether a person was carrying on business and the Supreme Court answered in the affirmative. There was no dispute in that case in regard to the other ingredients of business. The above decision, therefore, is not of any assistance in deciding the issue before us. Moreover, in the above case, considering from the point of view of volume, frequency, continuity and regularity, it was not a case of the assessee that the activity did not amount to business. The Government Medical Depot, in the above case, had been set up for the purpose of procuring and supplying medical stores to the Government institutions, both Central and State, as also the railway establishments located in Assam, North-Eastern Frontier areas, Nagaland, Manipur, Tripura and other neighbouring places on payment. The depot had been set up with a view to facilitating supply of medical store to the Government institutions and the motive in locating the same was to function as a distributing centre for the purpose of supply of med ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution, such as religious or charitable institution, is not a business activity, any subsidiary activity which forms an integral part of the main activity cannot also be regarded as business activity; that the activity of sale of human hair offered by pilgrims to the temple in fulfilment of vows was not a commercial activity, as it was undertaken to avoid storage and health problems. It was also held that as the main activity of the devasthanam was neither commercial nor trading in nature, the incidental activity of running a canteen for the pilgrims, although of a business nature, was for the supply of foodstuffs to visiting pilgrims at reasonable prices, which was functionally integral to the main activity. The sales of food in the canteen were therefore held not liable to tax. We are in agreement with the conclusion arrived at in the above case. We, however, do not propose to discuss the reasoning of the court in that case because of the conclusion arrived at by us independently of the above decision that the basic activity of a person must be such which can be regarded as "business" in the normal connotation of the term. The amplification of the definition by including incident ..... X X X X Extracts X X X X X X X X Extracts X X X X
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