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TMI Blog2002 (3) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 matters to be decided on the facts and in the circumstances of each case. The question set out in the beginning in the negative and in favour of the respondent-assessee. - Civil Appeal No. 9445 of 1996, 1716 of 1999, S.T.R. No. 15 of 1992 - - - Dated:- 22-3-2002 - Judge(s) : SHIVRAJ V. PATIL., BISHESHWAR PRASAD SINGH Joseph Vellapally, Senior Advocate (U.A. Rana, Ashish Dholakia, Prashant Bezboruah, Advocates, with him), for the respondent in C.A. No. 1716 of 1999. Shyam Mudaliar, Advocate, for U.U. Lalit, Advocate, for the respondent in C.A. No. 9445 of 1996. S.K. Dholakia, Senior Advocate (S.V. Deshpande, Advocate, with him), for the appellant. JUDGMENT Civil Appeal No. 9445 of 1996: The judgment of the court was delivered by SHIVARAJ V. PATIL J.- -In the light of the contentions raised and submissions made on behalf of the parties, the issue that arises for consideration and decision in this ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective effect from August 16, 1985, to provide that even without profit motive, it can still be "business". In the appeal filed before the Maharashtra Sales Tax Tribunal against the said order of the Deputy Commissioner, it was contended on behalf of the Trust that it was not a "dealer" within the meaning of section 2(11) of the Act as it was not engaged in any activity which amounted to "business" in view of the object and activities of the Trust. The Revenue supported the order of the Deputy Commissioner relying on the amendment of the definition of "business" as a result of which profit motive was immaterial. The Tribunal, after due consideration of the rival submissions looking to the object of the trust and the nature of its activities, concluded that the assessee could not be held to be a "dealer" and as such no tax could be levied on the amount received by it from the sale of its publications. At the instance of the Revenue, reference was made under section 61(1) of the Act by the Tribunal to the High Court for its opinion on the following question: "Whether, on the facts and circumstances of the case and correct interpretation of the provisions of the Bombay Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned senior counsel for the appellant. The learned counsel for the respondent in this appeal, while adopting the arguments of Shri Vellapally, made submissions supporting the impugned judgment. At the outset, it is useful to notice a few provisions of the Act to the extent they are relevant in order to appreciate the respective contentions relating to the controversy that has arisen. "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, such trade, commerce, manufacture, adventure or concern; and any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern;" "2. (11) 'dealer' means any person who whether for commission, remuneration or otherwise carries on the business of buying or selling goods in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 3 itself, the liability to pay sales tax is only on dealers. From the combined reading of sections 3, 2(5A) and 2(11) of the Act, it follows that the tax under the Act is leviable on the sales or purchases of taxable goods by a dealer and not by every person. From the facts of the present case, the sole object of the assessee-trust is to spread the message of Saibaba of Shiridi. It is also not disputed that the books and literature, etc., containing the message of Saibaba were distributed by the trust to the devotees of Saibaba at cost price. There is no dispute that the primary and dominant activity of the trust is to spread the message of Saibaba. This main activity does not amount to "business". The activity of publishing and selling literature, books and other literature is obviously incidental or ancillary to the main activity of spreading the message of Saibaba and not to any business as such even without a profit motive and it is in a way a means to achieve the object of the trust through which the message of Saibaba is spread. It is clear from the trust deed and objects contained therein that it was not established with an intention of carrying on the business/occupa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(d) and in most of the sales tax statutes is an inclusive definition and includes 'trade or business or manufacture, etc.'. This itself shows that the Legislature has recognised that the word 'business' is wider than the words 'trade, commerce or manufacture, etc.'. The word 'business' though extensively used is a word of indefinite import, in taxing statutes, it is normally used in the sense of an occupation, a profession-which occupies time, attention and labour of a person, normally with a profit motive and there must be a course of dealings, either actually continued or contemplated to be continued with a profit motive and not for sport or pleasure (State of Andhra Pradesh v. H. Abdul Bakshi and Bros. [1964] 15 STC 644 (SC); AIR 1965 SC 531). Even if such profit motive is statutorily excluded from the definition of 'business' yet the person could be doing 'business'. 16. The words 'carrying on business' require something more than merely selling or buying, etc. Whether a person 'carries on a business' in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or buying, etc., that constituted a person a "dealer" but the "object" of the person who carried on the activities was important. It was further stated that it was not every activity or any repeated activity resulting in sale or supply of goods that would attract sales tax. If the Legislature intended to tax every sale or purchase irrespective of the object of the activities out of which the transactions arose, then it was unnecessary to state that the person must "carry on business" of selling, buying, etc. In para. 33 of the same judgment, this court has referred to various decisions to consider whether one is a "dealer" or carries on "business" and the nature and object of activity. The said para. reads thus: "In Girdharilal Jiwanlal v. Assistant Commissioner of Sales Tax [1957] 8 STC 732 (Bom), relied on for the respondent-Port Trust, the Bombay High Court held that an agriculturist did not necessarily fall within the definition of a 'dealer' under section 2(c) of the C. P. and Berar Sales Tax Act (Act 21 of 1947), merely because he sold or supplied commodities. It must be shown that he was carrying on a business. It was held that it must be established that his prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 428 (All), with respect to the visitor's hostel maintained by the Indian Institute of Technology where lodging and boarding facilities were provided to persons who would come to the Institute in connection with education and the academic activities of the Institute. It was observed that, the statutory obligation of maintenance of hostel which involved supply and sale of food was an integral part of the objects of the Institute. Nor could the running of the hostel be treated as the principal activity of the Institute. The Institute could not be held to be doing business. Similarly, in the case of a research Organisation, in Deputy Commissioner (C. T.) v. South India Textile Research Association [1978] 41 STC 197 (Mad) which was purchasing cotton and selling the cotton yarn/cotton waste resulting from the research activities, it was held that the Institute was solely and exclusively constituted for the purposes of research and was not carrying on 'business' and these sales and purchases abovementioned could not be subjected to sales tax. Likewise, in State of Tamil Nadu v. Cement Research Institute of India [1992] 86 STC 124 (Mad), it was held that the Institute was an organization t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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