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TMI Blog2015 (4) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... on is registered under Section 12AA of the Income Tax Act (for short, 'IT Act') and it is a public society formed and registered on 16th March, 1951 under the provisions of Indian Societies Act, 1860 and also under Rajasthan Societies Act, 1958. It is claimed by the respondent-institution that it provides education to the girls and carries on similar activities for the welfare and over all development of girl students. It is claimed by the respondent-institution that it also has hostel facilities and is providing meals, books and other facilities to the students who reside in the hostel to get education in the University. The respondent has been treated as a "University" as per notification issued by the Education Department, Government of India. 3. A survey was carried in the premises of respondent-institution on 12/12/2012 by the Revenue Officials and during the course of survey, it was noticed that from the Assessment Years 2007-08 to 2012-13, the respondent-institution provided material namely; cement, iron and steel to the contractors for constructing its premises or/and maintenance of the properties being owned by it. Apart from the same, it sold prospectus to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the category "obligatory registration" held that even incidental activity comes into the category of business. The Revenue further contended that merely because it is a registered society, no exemption is available to it. It further expressed that reducing the contract value by providing cement, iron and steel comes within the definition of sale as ultimately the assessee purchased the same, handed over to the contractors and reduced the value. Therefore, first it purchased and then it sold/provided to the contractor and as such, it is in the nature of sale. It was also observed that the prospectus cannot be termed as a "book" as it is not in the category of book and that in the Assessment Year 2007-08 itself, the receipts/income by providing/selling the prospectus, was more than Rs. One Crore. Accordingly, the AO registered the assessee as under the category of 'Obligatory Registration" under Section 11 of the RVAT and also imposed a penalty to the tune of Rs.One Thousand as the assessee did not get itself registered. 6. The matter was carried in appeal before the appellate authority who dismissed the appeal of the respondent-assessee and upheld the finding of the AO after co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mately have been reduced out of the contract amount. He contended that in the subsequent years, the purchases have increased even three times to what has been shown in the Assessment Year 2007-08. He further contended that substantial amount is recovered/received by way of sale of prospectus & admission form and in the Assessment Year 2007-08, it was to the tune of Rs. 1,41,43,321/- which increased every year. He further contended that there are benefits under the RVAT and if the assessee has purchased the items after paying VAT, it gets due benefit as input tax credit and others but under Section 11, it is primarily to be seen whether it is required to be registered or not. 9. He further contended that whether one is a society or a trust, if it carries on activity as a dealer, certainly it is required to be got registered. He contended that the definition of sale under Section 2(35) is very wide and covers the respondent-institution as well. He further contended that the exemption has been provided under the RVAT to few universities', hostels and other institutions but not to the institutions like the present assessee. He further contended that the text books are certainly ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (1999) 4 SCC 630. He also relied upon judgment rendered by Allahabad High Court in the case of Mahatma Gandhi Kashi Vidyapeeth Vs. State of UP and ors.: (2013) 64 VST 271 (All); Andhra Pradesh High Court in the case of Gowtham Residential Junior College Vs. Commercial Tax Officer, Benz Circle, Vijayawada: (2009) 19 VST 305 (A) of Uttarakhand High Court in the case of Scholars Home Senior Secondary School Vs. State of Uttarakhand and another: (2011) 42 VST 530 (Uttara). He laid stress on judgments of various courts who have primarily come to the same view as taken by Hon'ble Apex Court in its judgment rendered in the case of Commissioner of Sales Tax Vs. Sai Publication Fund: (2002) 4 SCC 57 where even the Hon'ble Apex Court came to the conclusion that even sale of religious books is not in the nature of business activities. He further contended that to maintain quality, the assessee had purchased cement,iron and steel directly from the dealers and provided the same to its contractors and there is no value addition at all as, on whatever cost value, items has been purchased, the same has been deducted out of the contract value and that entire purchases of these items is af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmerce or manufacture; or (ii)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 gain or profit accrues from such trade, commerce, manufacture, adventure or concern;or (iii) any transaction in connection with or incidental to or ancillary to such trade, commerce, manufacture, adventure or concern; or (iv) any transaction in connection with or incidental or ancillary to the commencement or closure of such business; or (v) any occasional transaction in the nature of such trade, commerce,manufacture, adventure or concern whether or not there is volume, frequency,continuity or regularity of such transaction;" "2(11) "dealer" means any person, who carries on business in any capacity, of buying, selling, supplying or distributing goods directly or otherwise, or making purchases or sales as defined in clause (35) for himself or others, whether for cash or deferred payment, or for commission, remuneration or other valuable consideration and shall include (i) a factor, broker, commission agent, del credere agent or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d period) for cash, deferred payment or other valuable consideration; (v) a supply of goods by an unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; and (vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply shall be deemed to be a sale and the word "purchase" or "buy" shall be construed accordingly; Explanation- Notwithstanding anything contained in this Act, where any goods are sold in packing, the packing material in such case shall be deemed to have been sold with the goods;" 16. A reading of all the Sections, referred to supra, shows that it prescribes that a person, may be a University or an Institution/Society or otherwise who may carry on any trade, commerce or manufacturing activity or in the nature of trade, commerce or manufacturing and whose even incidental or ancillary activity is in the nature of trade, commerce and manufacturing or even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferring knowledge, abilities, values and skills from the professors/teachers to the students for the overall development of the students. Education helps to develop personality of a person. An educated youth becomes capable to find clear picture and right direction of his life. Education gives a man meaning of life. Education plays a key role in the development of the society as well. There is vast advancement in the field of education. Education leads to research,it opens new avenues, new vistas, new creations and new innovations. It is the ultimate path way of success. Education gives a great deal of support and encourages each and every student. "Being educated is the biggest asset of a person (male and female) and no one can deny that education is given highest place in this world." Education teaches values, character and outshines a person when enters in the social field. Even right to education is a fundamental right under Article 21A of the Constitution. Even as per this right, students upto the age of 14, should study but not work. In my view, education is an essential commodity like food, clothes and shelter. It is a key to success of an individual. Education is the real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he areas which are inhabited by human beings or near the areas of human habitation where children, including those belonging to the down trodden classes or the poor men also may be able to be educated. 23. Therefore, when one consider the above aspects, in my view, there can be no dispute that in the case of the petitioner, the primary and predominant activity is to impart education. This primary and predominant activity of the petitioner cannot be said to be a commercial activity nor it can be said to be a trade or business and this Court is also of the same opinion. 24. The Hon'ble Apex Court in State of Tamil Nadu vs. Board of Trustees of the Port of Madras (supra) in paras 15- 16 has stated: "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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shridi as already noticed above." In the ultimate analysis it held it not liable to be registered. 27. The Allababad High Court in Mahatma Gandhi Kashi Vidhyapeeth (supra) observed "that the element of business i.e., motive on the part of the University to indulge in any business activity is totally lacking and statutorily impossible. The University in that case was established under the U.P. State Universities 21 Act, 1973 to impart education in various discipline of higher education and research. In that case High court observed that, it was a matter of mere convenience for students and University to get the forms printed for a price and not more than that and thus the University was not a 'dealer' within the meaning of Section 2(h) of the U.P. Value Added Tax Act and, its activities of printing and selling of admission forms to the students did not amount to business within the meaning of Section 2(e) of the Act. Admittedly respondent is a reputed old University of high repute. 28. The case of M/s Manipal University (supra) relied by counsel for the Revenue is completely distinguishable on its facts. In the said case it was not in dispute that the University was a reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hool Vs. State of Uttarakhand and another (supra), considering a case of supply of food to its residential students, which is incidental, whether would mean to business or not, held as under:- "In the light of the aforesaid, the main activity of the Petitioner is imparting education and is not business. Any transaction, namely, supply of food stuff 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 food stuff 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. The contention of the Respondents that the dominant intention is not required to be seen in view of the amended definition of the word 'sale' pursuant to the 46th Amendment in the Constitution and that the sale of food stuff would be a sale as contemplated under Section 2(40)(f) of the Act is based upon a decision in Bharat San ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lary activities would not normally amount to business unless an independent intention to conduct business in these connected, incidental or ancillary activities is established by the revenue. (See Board of Trustees of the Port of Madras) (supra). In such cases the onus of proof of an independent intention to "carry on 'business" connected with or incidental or ancillary would rests on the department. Banasthali Vidyapeeth is also a deemed University and publication of 'prospectus' contains activities of the University, courses, syllabus, applications, fees etc. Making it available to the students for their information, knowledge,consideration and applying for admission to the course found suitable is ancillary, incidental and essential to its main and predominant object to impart education. It is well known that Banasthali Vidyapeeth is first in the State of Rajasthan for girls education and a pioneer institution serving for the last several decades. Its activity of printing and selling of prospectus is not main activity and would not amount to "business". Hence it is not a dealer liable to be registered under the Rajasthan VAT Act. It is also noticed that the sale of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of such quantity of materials and stores so supplied was specified at a rate and got set off or deducted form any sum due or to become due thereafter to the contractor". The case of N.M. Goel & Co. (Supra) was also followed in Cooch Behar Contractors Association Vs. State of West Bengal and Ors. And ultimately held that it amounts to a sale within the definition of sale in the Local Sales Tax Act. 37. However, the Hon'ble Court also observed : "This leaves us to consider the argument advanced by Shri Nikhil Nayyar, learned counsel on behalf of one of the appellants in C.A. Nos. 5270-5271 of 2003 wherein the learned counsel contended that the levy under the local Act being a single point tax and the appellant having suffered the same when it purchased the material in question and same material cannot be subjected to another levy on its transfer to the contractor. This argument requires consideration of factual matrix of the case concerned, whether the levy in question is a single point tax and material purchased by the appellants had suffered the levy at the point of purchase by appellants or not are matters to be decided by the authorities concerned and if the same is not al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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