TMI Blog2014 (5) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... o business or trading activity by the assessee/Devasthanam. Relying upon Tirumala Tirupati Devasthanam, Tirupati v. The State of Madras and another [1971 (8) TMI 192 - MADRAS HIGH COURT] - Which was referred with approval impliedly by the Apex Court in Commissioner of Sales Tax v. Sai Publication Fund [2002 (3) TMI 45 - SUPREME Court] wherein the Apex Court elaborately has discussed about the various terms including business, dealer, etc., and held that to term a person as a dealer there must be a profit motive - The Revenue neither contended nor proved that in sale of publications the Trust had an independent intention to do business as incidental or as an ancillary activity. Relying upon Commissioner of Sales Tax v. Sai Publication Fund [2002 (3) TMI 45 - SUPREME Court] - It may be stated that the question of profit motive or no-profit motive would be relevant only where a person carries on trade, commerce, manufacture or adventure in the nature of trade, commerce etc. - In the present case irrespective of the profit motive, it could not be said that the Trust either was dealer or was carrying on trade, commerce etc. - The Trust is not carrying on trade, commerce etc., in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthapani Swami Thirukkoil v. Commercial Tax Officer-II, Palani, (1998) 108 STC 114 in respect of a temple offering prasadam to devotees, having found that the dominant activity of the assessee is religious and charitable in nature and not business, has set aside the order of the Assessing Officer. 2.3. Being aggrieved, the State has filed an appeal to the Tribunal. The Tribunal, while setting aside the order of the Appellate Assistant Commissioner, has confirmed the order of the Assessing Officer. A reference to the impugned order of the Tribunal shows that the Tribunal has considered the assessee as a dealer under Section 2(g) of the Act in respect of the auction conducted for the sale of the above said offerings to come to a conclusion that even though it is a solitary transaction, it amounts to business and the assessee should be treated as a dealer. The Tribunal relied upon the judgment of the Apex Court in Karnataka Pawn Brokers Association v. State of Karnataka, (1998) 111 STC 752, wherein it was held that activity of pawn brokers in selling the pledged goods by auction should be treated as a business and they should be treated as dealer and accordingly, tax is liable to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er offerings. 7. By dint of the scheme settled by the Apex Court, we have no doubt that the activity of the assessee is religious in nature. The conduct of sale of the offerings is incidental to the object which is totally religious. That has also been the finding given by the authorities below. 8. The reliance placed on by the Tribunal on the judgment of the Apex Court in Karnataka Pawn Brokers Association v. State of Karnataka, (1998) 111 STC 752 is not applicable to the facts of the present case. That was a case where pawn brokers, whose business is commercial in nature, in the course of their business dealings sold pledged jewels and ornaments in respect of which the amounts were not repaid by public auction. It was in those circumstances, taking into consideration that the object of the pawn brokers in selling by public auction is during the course of their business, the Apex Court has held that the same is liable to tax. 9. On a reference to Section 2(g) of the Act, which is as follows: Section 2(g) 'dealer' means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell, supply or distribute goods, directly or otherwise, for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act; , it is very clear that to treat a person as a dealer, the activity he carries on must be in the course of the business. The term business , which is defined under Section 2(d) of the Act as follows: Section 2(d) business includes (i) any trade, or 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 profit accrues from such trade, commerce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; also makes it very clear that it relates to the trade and commerce and any transaction incidental thereto. Therefore, by a bare application of the definition of the above said terms which are the basis for the purpose of imposing tax under the Act, to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 287. Quoting with approval the finding by the Division Bench in Sri Thirumagal Mills Ltd. case, it was held as follows: In Deputy Commissioner of Commercial Taxes v. Sri Thirumagal Mills Ltd., (1967) 20 STC 287, a limited liability company manufacturing cotton yarn, in order to provide amenity to its workmen, had opened a fair price shop so that commodities might be made available to its workmen at fair prices. The turnover made by the company in such a transaction was sought to be brought to tax by the revenue. A Division Bench of this Court, to which I was a party, observed as follows: Unless a transaction is connected with trade, that is to say, it has something to do with trade or has the incidence or elements of trade or commerce, it will not be within the definition of 'business' in the Madras General Sales Tax Act, 1959, as amended by Act 15 of 1964. The words 'in connection with or incidental or ancillary to' in the second part of the definition of 'business' still preserve or retain the requisite that the transaction should be in the course of business understood in a commercial sense. The intention of Madras Act 15 of 1964 is not to bring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling them at cost price to spread message of Saibaba does not make it a dealer under Section 2(11) of the Act. 12. This Court in State of T.N. v. Board of Trustees of the Port of Madras, (1999) 4 SCC 630 after referring to various decisions in regard to business and carrying on business in paras 15 and 16 has stated thus: 15. Now the definition of business in 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 recognized 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 A.P. v. H. Abdul Bakhi Bros., AIR 1965 SC 531). Even if such profit motive is statutorily excluded from the definition of business , yet the person could be doing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st price without intending to make profit or gain. Having regard to main activities and its objects, it was held that the educational society was not established to carry on business and the sale of bricks was held not excisable to sales tax. Chagla, C.J. pointed out that it was not merely the act of selling 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 transaction arose, then it was unnecessary to state that the person must carry on business of selling, buying etc. 16. 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: 33. In Girdharilal Jiwanlal v. CST, (1957) 8 STC 732 (Bom), relied on for the respondent-Port Trust, the Bombay High Court held that an agriculturist did not necessarily fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not carrying on business and the sale of food at the dining halls was not liable to tax. Likewise after the amendment of the definition of business question arose in Indian Institute of Technology v. State of U.P., (1976) 38 STC 428 (All) with respect to the visitors' 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 the 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 organization, in Dy. Commr. (C.T.) v. South India Textile Research Assn., (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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