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TMI Blog2007 (4) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... al institutions and all of these institutions are running hostels for providing boarding and lodging facilities to the inmates of the educational institutions. The purchases of foodstuffs made from unregistered dealers and supplied to the students as food, have been assessed under section 6A of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as "the Act"). The matter went up to the Sales Tax Appellate Tribunal (for short, "the Tribunal"). The Tribunal also decided in favour of Revenue. Therefore, these writ petitions and the revisions. The learned counsel for the petitioners submit that as a matter of fact, the primary object of these educational institutions is to impart education to the student ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in the present case. In the case before the Allahabad High Court, the Indian Institute of Technology, Kalyanpur was maintaining a hostel for the scholars, who would come for a brief period to the institute for the purpose of research. This hostel was also available to the friends and relatives of the students of the Institute of Technology. The food being supplied there was assessed to sales tax. The High Court of Allahabad, considering the rival arguments and the judgments placed before it, came to the conclusion: (page 434) "The distinction laid down in the aforesaid decisions between a case, on the one hand, where the principal activity of an institution is doing business in a commercial way, and, on the other hand, a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubbed as a 'dealer' within the meaning of section 2(c) of the U.P. Sales Tax Act. The Sales Tax Officer had accordingly no jurisdiction to initiate proceedings for levy of sales tax on the petitioner." In a judgment in State of Tamil Nadu v. Board of Trustees of the Port of Madras [1999] 114 STC 520, the Supreme Court was considering a controversy with regard to the activity of Port Trust of Madras of selling the unserviceable goods. The Supreme Court, in this case also, came to the conclusion that the main and predominant activity of the Port Trust was not business. Therefore, its activity of selling the unserviceable goods could not be termed as carrying on business within the meaning of the definition of "carrying on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search activity but not a business activity and the sales and purchases could not be subjected to sales tax. Same principles were laid down in another Division Bench judgment of this court in Visakhapatnam Port Trust v. Commercial Tax Officer [2002] 127 STC 393. In view of these judgments, we have no doubt in our mind that purchasing of food items by the petitioners and supplying them to the students in the hostels could not be taxed under the Sales Tax Act. It appears that the Tribunal, in its order, had appreciated the law on the subject, but had misdirected itself, because it was under the impression that imparting of education and running of educational institutions could, in certain circumstances, be a commercial activity. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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