9911796707
TMI Blog2014 (5) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal is right in applying Karnataka Pawn Brokers Association v. State of Karnataka, (1998) 111 STC 752? 3. Whether the Appellate Tribunal erred in not seeing that the appellant is a religious institution?" 2.1. The assessee Sri Velur Devasthanam of Dharmapuram Adhinam, Nagapattinam District has sold gold bullion offered by the devotees by public auction to the value of Rs. 11,88,150/-. A notice issued by the Department under the Tamil Nadu General Sales Tax Act, 1959 (for short, "the Act") was objected to by the assessee on the basis that the assessee was not carrying on any business and it is not a dealer and it is a Devasthanam. However, the Assessing Officer has made assessment on the turnover of Rs. 11,88,150/-, in addition to the additional sales tax. 2.2. Aggrieved by the said order, the assessee filed an appeal before the Appellate Assistant Commissioner, who, by relying upon the judgment in Arulmigu Dhandayuthapani Swami Thirukkoil v. Commercial Tax Officer-II, Palani, (1998) 108 STC 114 in respect of a temple offering prasadam to devotees, having found that the dominant activity of the assessee is religious and charitable in nature and not business, has set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner as well as the respondent and referred to the impugned order of the Tribunal and other records, including the scheme framed in respect of the assessee/ Devasthanam. 6. On a reference to the scheme framed in respect of the Devasthanam, which has been ultimately settled by the Supreme Court in Sri La Sri Subramanya Desiga Gnanasambada Pandarasannadhi v. State of Madras, AIR 1865 SC 1683, it is seen that the object of framing of the scheme is for maintenance of the main temple, the shrines and minor temples attached thereto, and charities and endowments thereof, which are all comprised in Velur Devasthanam. The scheme also enables the trustee with the permission of the Commissioner of Hindu Religious and Charitable Endowments Department to sell in public auction the jewels and ornaments gold and silver coins not in circulation and other metallic objects in the hundials, except current coins and any other offerings. 7. By dint of the scheme settled by the Apex Court, we have no doubt that the activity of the assessee is religious in nature. The conduct of sale of the offerings is incidental to the object which is totally religious. That has also been the finding g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not for a specified period) for cash, deferred payment or other valuable consideration; (ix)a person engaged in the business of supplying by way of, or as part of, any service or in any other manner whatsoever of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration; Explanation (1) A society (including a co-operative society), club or firm or an association which, whether or not in the course of business, buys, sells, supplies or distributes goods from or to its members for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act. Explanation (2) The Central Government or any State Government which, whether or not in the course of business, buy, sell, supply or distribute goods, directly or otherwise, for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act;", it is very clear that to treat a person as a dealer, the activity he carries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertainly, the said judgment has no application to the facts of the present case. 11. On the other hand, as submitted by the learned counsel for the petitioner, a very similar issue in respect of sale of silver by Tirumala Tirupati Devasthanam, Tirupati was decided by this Court in Tirumala Tirupati Devasthanam, Tirupati v. The State of Madras and another, (1972) 29 STC 266 (Madras). In the said decision, while referring to various definitions under the Act, including dealer and business, in the context of the Devasthanam selling the metallic objects which are realised in hundials, it was held that the same was not in the course of any business being conducted by the Devasthanam, since it is not with a profit motive. To arrive at such conclusion, this Court has relied upon an earlier judgment in Deputy Commissioner of Commercial Taxes v. Sri Thirumagal Mills Ltd., (1967) 20 STC 287. Quoting with approval the finding by the Division Bench in Sri Thirumagal Mills Ltd. case, it was held as follows: "In Deputy Commissioner of Commercial Taxes v. Sri Thirumagal Mills Ltd., (1967) 20 STC 287, a limited liability company manufacturing cotton yarn, in order to provide amenity to its workm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal or ancillary activity may not come within the meaning of business . To put it differently, the inclusion of incidental or ancillary activity in the definition of business presupposes the existence of trade, commerce etc. The definition of dealer contained in Section 2(11) of the Act clearly indicates that in order to hold a person to be a dealer , he must carry on business and then only he may also be 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 on 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. 12. This Court in State of T.N. v. Board of Trustees of the Port of Madras, (1999) 4 SCC 630 after referring to various decisions in regard to business and carrying on business in paras 15 and 16 has stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case would fall under the first category referred to earlier. (emphasis supplied) 14. In the case on hand, the Revenue neither contended nor proved that in sale of publications the Trust had an independent intention to do business as incidental or as an ancillary activity. 15. This Court in the aforementioned judgment further examined the cases to find out if the main activity was not business . In para 32, reference is made to the case of the Bombay High Court in State of Bombay v. Ahmedabad Education Society, (1956) 7 STC 497 (Bom). In that case, the educational society was entrusted with the task of founding a college and for that purpose it was to construct buildings therefor. It was held that it could not be said to be carrying on business merely because for the above purposes, it established a brick kiln and sold surplus bricks and scrap at cost price without intending to make profit or gain. Having regard to main activities and its objects, it was held that the educational society was not established to carry on business and the sale of bricks was held not excisable to sales tax. Chagla, C.J. pointed out that it was not merely the act of selling or buying etc. that const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (All) was dealing with a batch of cases where different bodies were running canteens. One of the cases concerned Aligarh Muslim University which was maintaining dining halls where it was serving food and refreshments to its resident-students. It was held, referring to observations of this Court in University of Delhi v. Ram Nath, AIR 1963 SC 1873 that it was incongruous to call educational activities of the University as amounting to carrying on business . The activity of serving food in the dining hall was a minor part of the overall activity of the University. Education was more a mission and avocation rather than a profession or trade or business. The aim of education was the creation of a well-educated, healthy, young generation imbued with a rational and progressive outlook of life. On this reasoning, it was held that Aligarh University was not carrying on business and the sale of food at the dining halls was not liable to tax. Likewise after the amendment of the definition of business question arose in Indian Institute of Technology v. State of U.P., (1976) 38 STC 428 (All) with respect to the visitors' hostel maintained by the Indian Institute of Technology where lodgi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure or adventure in the nature of trade, commerce etc. On the facts and in the circumstances of the present case irrespective of the profit motive, it could not be said that the Trust either was dealer or was carrying on trade, commerce etc. The Trust is not carrying on trade, commerce etc., in the sense of occupation to be a dealer as its main object is to spread message of Saibaba of Shirdi as already noticed above. Having regard to all aspects of the matter, the High Court was right in answering the question referred by the Tribunal in the affirmative and in favour of the respondent-assessee. We must however add here that whether a particular person is a dealer and whether he carries on business , are the matters to be decided on facts and in the circumstances of each case." 13. By applying the said decision of the Apex Court to the facts of the present case, we are of the view that the reasoning as given by the Tribunal in the impugned order is unsustainable. Accordingly, this revision stands allowed and the impugned order of the Tribunal stands set aside and the order of the Appellate Assistant Commissioner stands restored. The questions of law are answered in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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