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TMI Blog1966 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... od ending on 31st March, 1960, and on 31st March, 1961. Writ Petition No. 674 of 1964 relates to the earlier period, while Writ Petition No. 103 of 1964 relates to the later period. The petitioner represented to the Commercial Tax Officer by his letter dated 15th January, 1963, that the canteen was not liable to be taxed but was informed by the Commercial Tax Officer by his letter of 28th January, 1963, that the petitioner could appeal if it felt aggrieved by the order of assessment. The petitioner next made a representation to the Commissioner of Commercial Taxes, who by his letter dated 24th April, 1963, informed the petitioner that the canteen was liable to pay the tax which it was called upon to pay. The argument presented in these two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph proceeds to state that the administration was supplying electric power and water along with cooking utensils and furniture free of cost, besides making the payment of a subsidy to the extent of 50 per cent. of the wages of the canteen employees. The emphasis on the other parts of the affidavit is upon the fact that the activity of the canteen was a measure of labour welfare on a no-profit and no-loss basis and that although sometimes the realisations slightly exceeded the expenditure incurred, there was no profit motive on the part of the canteen. These statements contained in the petitioner's affidavit are undisputed statements supported by documents, which the petitioner produced. The question is whether on these allegations an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and to non-members there was no sale in the course of a trade or business and that the canteen, which did not carry on a business of buying, selling, supply or distribution, was not a dealer within the meaning of the Act. It is obvious that the canteen could be called upon to pay the tax only if it is a dealer. It becomes a dealer only when it carries on the business of buying and selling, supply and distribution and a tax which it could be called upon to pay is a tax upon the sale of goods in the course of a trade or business carried on by it. It was said that the canteen carried on no business and made no sale in the course of any trade or business since the activity in which it engaged itself did not involve any intention to make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .I.R. 1954 Mad. 1144., the view expressed was that the sale of refreshments by a club to its members was not a sale within the meaning of the General Sales Tax Act as the club was an association not designed for making a profit and there was no intention to make one. In Sree Meenakshi Mills Ltd. v. State of Madras[1954] 5 S.T.C. 291; A.I.R. 1954 Mad. 1143., the question was whether the mill, which made sales of refreshments in its canteen for the benefit of its employees in conformity with the requirements of the Factories Act, made sales within the meaning of the Act and the Madras High Court held that the sales were not made in the course of any business. The view that no activity which does not involve an intention for the acquisition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, which was imperative under section 46 of the Factories Act (Central Act 63 of 1948) without there being any motive to make a profit, carried on a business within the meaning of the new definition and became liable to pay the tax on the sales of such refreshments and food. Although the period for which there was an assessment in that case was antecedent to the introduction of the new definition, section 9 of the amending Act (Madras Act 15 of 1964) gave in effect retrospective operation to that definition. But Mysore Act 9 of 1964 by which a definition of "business" was introduced into the Mysore Act was not given any such retrospective or retroactive operation with the result that the new definition for our purposes has no relevance sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly, the plain meaning of the 14th bye-law is that if nevertheless it was discovered that a profit had accrued to the canteen that profit should be disposed of in the manner specified by the 14th bye-law. Five balance sheets have been produced on behalf of the petitioner before us for the period between 30th June, 1959, and 30th June, 1963. From these balance sheets it emerges that there was a loss during the years 1958-59 and 1959-60 and that there was a small profit during the years 1960-61 and 1961-62. To deduce the real intention with which the canteen carried on its activity, we should look into the scheme and purpose of the endeavour and when we do so in the background of the assistance and co-operation which it received from the Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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