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1998 (5) TMI 24 - SC - VAT and Sales TaxWhether section 4 of Act 22 of 1950 as amended by Act 9 of 1974 is applicable for the assessment of the tax for the accounting year 1973-74 ? Whether since the object of the trust being propagation of Jain religion and the service of its followers, the trust is not entitled for the claim of exemption from tax under section 4 as it stands after the amendment of the Act by the Act 9 of 1974 ? Whether even the amount spent in this State in furtherance of the objects of the trust cannot be treated as allowable items of expense ? Whether is it justified in entering a finding that the object of the trust is only to spend money for the propagation of a particular type of religion and for the services of its followers ? Held that:- The authorities under the Act including the Appellate Tribunal minutely examined various terms of the trust deed and found that for all intents and purposes the object of the trust was to propagate a particular religion and to render service to the followers of that religion, particularly, with reference to the families who created the trust. The assessee, therefore, could not be considered for exemption, being a private trust, set up to promote a particular religion whose agricultural income does not enure for the benefit of general public. It was also found that most part of the agricultural income was spent for several purposes outside the State of Kerala. The exemption is allowed to the extent to which such agricultural income is applied to such purposes within the State of Kerala, if it is a public trust. The High Court decided the questions referred to it only in the abstract without considering as to how much agricultural income of the trust was spent in Kerala. We have also examined the trust deed which was produced at the time of arguments. The deed of trust and the rules run into more than thirty pages out of which six pages of the trust deed narrate the philosophy of the Jain dharma. The objects of the trust clearly show that the trust is meant for propagation of the Jain religion and rendering help to the followers of the Jain religion. Even the medical aid and similar facilities are to be rendered to persons devoted to the Jain religion and to non-Jains if suffering from ailments but the medical aid could be given to them only if any member of the families managing the trust, shows sympathy and is interested in their treatment. The Tribunal, in our opinion, was right in its conclusion that the dominant purpose of the trust in the present case was propagation of the Jain religion and to serve its followers and any part of agricultural income of the trust spent in the State of Kerala also could not be treated as an allowable item of expense. Set aside the impugned judgment of the High Court and answer questions Nos. 2 to 4 in favour of the Revenue and against the assessee-trust.
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