TMI Blog1997 (9) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ing among the Hindus. After the pooja or seva performed on the deity, prasadams are offered to the devotees. One such prasadam offered by the appellant to the devotees is panchamirtham, which is very famous and called as Palani Murugan Panchamirtham . Every devotee who worshipped Lord Muruga at Palani Hills purchases panchamirtham from the appellant. The panchamirtham is made out of banana, wet dates, jaggery, cardamom, etc. For this, most of the ingredients are coming to the appellant as offerings to the deity by the worshippers. Only for shortage, the appellant is compelled to purchase the same from the open market and this practice is being followed by the appellant from time immemorial. No sales tax was levied either for the abovesaid purchases from the open market or for the sale of the abovesaid prasatham panchamirtham in the past years. The Government had also clarified by their letter No. 48529/11-2/79 dated May 6, 1992 that the sale of prasatham by the temples in Tamil Nadu like the appellant is not liable to tax under the Tamil Nadu General Sales Tax Act, 1959. The abovesaid clarification was given by the Government based on the principles laid down by various High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is not a dealer and is not carrying on any business as contemplated under the Act. The Government had clarified, following various decisions of various High Courts, that the sale of prasadam or offerings by the temples in the State are not liable to tax on the ground that the temples are not dealers and they are not doing any business for attraction of tax under the Act. While this being so, the levy of tax on the appellant s purchase is totally without power and jurisdiction and is liable to be quashed. 8.. During the pendency of the writ appeal, the respondent had issued preassessment notices dated March 29, 1995 for the assessment years 1992-93 and 1993-94 proposing to assess the appellant s purchase turnover of jaggery under section 7-A of the Act and also proposed to levy penalty. Since the notices for the assessment years 1992-93 and 1993-94 are totally without jurisdiction and power, the appellant left with no other effective alternative remedy, filed W.P. No. 11894 of 1995 for a mandamus forbearing the respondent from subjecting the appellant/petitioner to assessment under the Act. The writ petition was admitted by this Court on September 1, 1995. 9.. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. V. Ramachandran, learned Senior Counsel submitted that the learned single Judge has dismissed the writ petition on the short ground that the appellant has an alternative remedy to challenge the order impugned in the writ petition. According to the learned Senior Counsel the order of the learned Single Judge is not correct since the impugned order has been passed without jurisdiction or authority of law. In fact, the settled provision that the appellant is not a dealer and they are not carrying on any business as contemplated under the Act which had been followed by the respondent till the previous assessment year in 1990-91 has been thrown to wind by the respondent herein without adducing any reasons and hence the impugned order is in gross violation of natural justice and totally against the principles laid down by various High Courts in various decisions. 12.. Mr. T. Mathi, learned Government Advocate arguing contra, submitted that the appellant s activities of preparing prasadams and sale at the counter to the devotees will not at all constitute a sale as defined under section 2(n) of the Act but also attract the levy of sales tax under the Act. 13.. Mr. V. Ramacha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such auctions. According to the State, the amount realised in the public auction, being the realisation in such auctions are to be deemed as monies obtained from sale of goods in the course of business of the Devasthanam and consequently the turnover involved in such sales in each of the years attracted sales tax under section 3(1) of the Act. The Devasthanam was also informed that they ought to have registered themselves as dealers under the Act, and not having done so under the provisions of the Act, the penal provisions of the Act are attracted. The Devasthanam filed written objections. Their further contention was that it was not a commercial activity undertaken by them in the course of any business of theirs, and though prima facie a sale, is involved, it is not in connection with the business of the Devasthanam and much less as a dealer under the provisions of the Act. The eminent Judge Ramaprasada Rao, J., after construing the provisions of section 2(d) and 2(g) held that in order to characterise a person as a dealer, the primary pre-requisite is that he should carry on business. In the words of the learned Judge: Such a business may be in myriad ways, such as buying, se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it will not be within the definition of business in the Madras General Sales Tax Act, 1959 as amended by Act 15 of 1964. 17.. In the decision reported in [1972] 29 STC 685 (All.) (Managing Committee, Temple Sri Bankey Behari Ji v. Commissioner of Sales Tax) the assessee, the managing committee of a temple, looked after the pooja of the deity installed in the temple. The assessing authority assessed tax on the turnover of the bhog. The appellate authority set aside the order of the assessing authority and recorded a finding that the primary object of the managing committee of the temple was to provide for the worship of the deity. It was only incidental to that object that the worshippers were required to make an offering of the bhog prepared in the bhog bhandar of the temple. The devotees or the worshippers were desirous of offering bhog to the deity and accepted whatever prasad was offered to them by the poojari. The temple did not carry on the business of selling sweetmeats. In revision, the revising authority reversed the order of the appellate authority and restored the order of the Sales Tax Officer, but did not upset the findings of fact recorded by the appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be in the nature of trade or commerce so as to bring it within the definition of the term business contained in section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, and, therefore, cannot be brought within the scope of the taxing provisions of the Act. 20.. In the decision reported in [1979] 44 STC 264 (State of Tamil Nadu v. Indian Officers Association) rendered by Sethuraman and Balasubrahmanyan, JJ., the question that arose before the Bench was, whether the Indian Officers Association, which was running a hostel to the inmates of the hostel following dividing system come within the meaning of sale under the Act and that the association was liable to sales tax. The Indian Officers Association, consisting of the officers of the State and Central Governments and also quasi-Government employees, was running a hostel in order to accommodate the children undergoing education in Madras of Government servants who were working outside Madras. The sales tax authorities rejected the claim of the association for exemption from sales tax in respect of the turnover of the mess in the hostel for the years 1966-67 and 1971-72 on the ground that the inmates of the hostel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. The Tribunal found that the assessee was supplying tiffin and refreshments only to its bona fide members and that it was not effecting any sales and it was not a dealer under the Act. On a revision to this Court, a Division Bench held that there was no sale of any refreshments by the assessee and, therefore, the assessee was not liable to sales tax. The Bench has further held that in the case of a members club, even though it is a distinct legal entity, it is acting only as an agent for its members in the matter of the supply of various preparations and articles to them and therefore, there is no element of transfer in such supplies and no sale is involved. 22.. The decision reported in [1989] 73 STC 321 (State of Andhra Pradesh v. Sri Bhramaramba Mallikarjuna Swamy Devasthanam), is a judgment rendered by a Division Bench of the Andhra Pradesh High Court holding that if the dominant activity of an institution, such as a religious or charitable institution, is not a business activity, but if the secondary activity has the elements of commerce or trading activity, then in order to claim exemption from tax, it must be established that it forms an integral part of the main act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in the sale of the goods stored in its godowns by the agriculturists. The agriculturists themselves sold the goods to the highest bidder. The petitioner only acted as an intermediary, and delivered the goods to the purchaser after the sale was completed, received the price, deducted its charges and paid the balance to the agriculturists. The petitioner was, therefore, not a dealer within the meaning of section 2(g) of the Act and was not liable to be assessed to sales tax. 24.. A very recent decision of our High Court reported in Board of Trustees of the Port of Madras v. State of Tamil Nadu [1998] 108 STC 66 supra; (1996) 10 MTCR 373, rendered by K.A. Swami, C.J., and one of us (AR. Lakshmanan, J.) can be usefully noticed and the principles laid down therein be applied to the case on hand. The Division Bench, on an elaborate consideration of the decisions cited before it and after considering the nature of duties to be discharged and the services rendered by the Port Trust, came to the conclusion that in none of the duties discharged and services rendered by the Port Trust, there is an element of trade or business. The Bench has also held that in order to hold that an associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t users as well as the maintenance of the Port Trust...... The question is not one whether any profit accrues or not from the functions or the activities carried on by the Port Trust. The question is one as to the nature of the duties required to be discharged and the services required to be rendered by the Port Trust. In none of the duties discharged and services rendered by the Port Trust, there is an element of trade or business. Therefore, we are of the view that as the provisions of the Major Port Trusts Act and the Tamil Nadu General Sales Tax Act stand today or stood on the date when the notice was issued to the Port Trust, the Port Trust cannot be directed to be registered as a dealer . If that be so, it cannot be held that it is bound to furnish the details of auction sales held, for the purpose of making a demand. 25.. The judgments above referred to have application to the case on hand. In the instant case, the appellant is looking after the pooja of the deity in the temple. After the pooja is performed on the deity, prasadams are offered to the devotees. One such prasadam offered by the temple to the deities is panchamirtham, which is popularly known as Palani Murug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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