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2014 (6) TMI 793 - HC - VAT and Sales TaxLiability of tax - Whether the supply of foodstuff to the students is a business or not - Held that:- Act would be applicable if a sale is made by a dealer or a person who carries on the business of taxable goods. The word "business" or "business activity" has been explained by various courts - from a combined reading of sections 3, 2(6), 2(11), 2(27), 2(40) of the Act, that a tax is leviable on the sale made by a dealer or a person who is carrying on the business of taxable goods. There is no dispute that in the case of the petitioner, the primary and dominant activity is to impart education. This main activity of the petitioner does not amount to a commercial activity nor is a trade or business as held by the Andhra Pradesh High Court in Gowtham Residential Junior College [2007 (4) TMI 642 - ANDHRA PRADESH HIGH COURT]. In the opinion of the court, such education being imparted by the petitioner is neither a commercial activity nor a trade nor does it amount to "business". It cannot be contended that the establishment of an educational institution is a business nor can it be called a trade since no trading activities are being carried out. Main activity of the petitioner is imparting education and is not business. Any transaction, namely, supply of foodstuff 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 foodstuff 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. - issuance of notice proposing to make an assessment under the Act on the supply of foodstuff to the residential students is patently without jurisdiction. The said notices are consequently quashed - Decided in favour of assessee.
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