TMI Blog2015 (4) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue, from time to time, that the sweetmeats and farsan are sold to the general public. - From the conduct of the assessee, it appears that the very activity of manufacture and sale of farsan and sweetmeats, is also not ancillary to the main object of the trust, but the same activity is carried out as purely business activity and that too on large basis continuously and having sizable volume. It is nowhere provided in the object of the trust to manufacture farsan and sweetmeats and to sell the same in open market, that too on large scale, in sizable volume with a continuous and regular activity. The profit earned out of the said activity is said to have been used for the purpose of achieving the object of the trust, however, the said activity of preparation of sweetmeats and farsan and selling the same, in no way could be termed as an activity ancillary to the main object of the trust, i.e. providing medical aid, education, manage Pyaus, to manage and run Ganesh Bhandar and to provide food, sweetmeats and other delicious food free of charge or at concessional rate. This is not a sale of literature or other material having any bearing on the teaching and message of somebod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brevity):- Whether on the facts and circumstances of the case, and on a true and correct interpretation of the definitions of the terms 'business' and 'dealer' in clauses (5A) and (11) of section 2 of the Bombay Sales Act, 1959, the Tribunal was justified in holding that the appellant's activity of manufacture and sale of sweetmeats and farsan is integral and incidental to his main charitable activity, and that therefore the appellant is not a 'dealer' and does not carry on 'business' qua its activity of manufacture and sale of sweetmeats and farsan ? 2. Few facts necessary for consideration of the Reference are as under :- The petitioner in the writ petition referred above (hereinafter referred to as the trust , for the sake of brevity) is a charitable trust, registered in the year 1960, which claims to have area of operation over the entire country. The said trust claims to be engaged in charitable activities, such as installation of water supply units, organizing the medical camps, free education to needy students, subsidized food packets or free meals on special occasions, etc. It is also claimed that the petitioner is operating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table activity as the activity is carried on in accordance with the trust deed and the income derived from the shop activity is spent on achieving charitable object of the trust. 8. The above referred view of the Tribunal has prompted the Revenue to file a Reference Application, in the context of judgment of the Tribunal, dated 25th January, 2001. This is how the Reference is placed before us. 9. The relevant provisions of the statute, which deal with the issue required to be answered, are as under :- The terms business , dealer and person are defined in sections 2 (5-A), 11 and 19 of the Bombay Act, which read thus:- S.2(5A)- business includes any trade, 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 gain or profit accrues from such trade, commerce, manufacture, adventure or concern and any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern; (11) dealer means any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 'business' and as the same is not ancillary to the main object of the trust. The trust is receiving huge profit out of the same and as such must be registered as a 'dealer.' 13. It is further claimed by the Revenue that the activity of the trust of manufacturing sweetmeats and farsan, etc. is a regular, continuous and of sizable volume and thus the trust is amenable to pay sales tax. 14. According to Revenue, the judgment of the Apex Court in the matter of Commissioner of Sales Tax vs. Sai Publication Fund, reported in (2002) 4 SCC 57, has hardly any application to the issue under reference as the facts and circumstances in which the Apex Court has answered the same against the Revenue, were altogether different. He would further urge that the Revenue has discharged its burden by demonstrating that the activity of the trust in question is within the ambit of 'business' and as such the trust must register itself as a 'dealer'. 15. It is further claimed by the Revenue that the issue can be very much answered in its favour, in view of the judgment of the Karnataka High Court, in the matter of M/s Manipal University, Represented by its Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of charge or at a concessional rate, or at cheap rate to needy and deserving persons. According to him, as the activity of the trust of preparation of farsan, sweetmeats, etc. and marketing thereof is ancillary to the main object of the trust, the Reference has to be answered in favour of the assessee. 17. After giving our thoughtful consideration to the submissions made by the Revenue and the assessee, it is required to be noted that the charitable activity as could be gathered from the provisions of the Bombay Public Trusts Act, 1950, under which the assessee is registered, could be termed as activity of general public utility. The charitable purpose as is provided under section 9 of the Maharashtra Public Trusts Act speaks of poverty or distress, education, medical relief, provision for facilitation for recreation or other leisure time occupation........... and the advancement of other objects of general public utility, however, excludes exclusive religious teaching or worship. The facilities which are provided in the interest of social welfare are not taken to be charitable activities, unless the qualification required under the Act is satisfied. 18. In the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the carrying out of the activity on very large scale in sizable volume, a continuous one and with a regular frequency. Thus, the activity is complete commercial in nature. 22. So far as the contention of the assessee that the issue is covered by the judgment of the Apex Court in the matter of Commissioner of Sales Tax vs. Sai Publication Fund (cited supra) is concerned, in the said case the trust was formed with an object to spread the message of Saibaba, however, the activity of publication and sales of books, pamphlets, photos, stickers, etc. was sought to be covered under the activity of 'business'. While dealing with the said issue, the Apex Court held that the said activity was not carried out with a profit motive and there was no independent intention of the said trust to conduct business. It was also observed by the Apex Court in the said judgment that it is not a repeated activity. While answering the issue of 'business' and 'dealer' in favour of the said assessee, the Apex Court has observed that the sole object of assessee trust in the said case was to spread message of Saibaba. The sale of literature and books containing message of Saibaba to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chases of taxable goods by a dealer and not by every person. From the facts of the present case, the sole object of the assessee Trust is to spread the message of Saibaba of Shirdi. It is also not disputed that the books and literature etc. containing the message of Saibaba were distributed by the Trust to the devotees of Saibaba at cost price. There is no dispute that the primary and dominant activity of the Trust is to spread the message of Saibaba. This main activity does not amount to business . The activity of publishing and selling literature, books and other literature is obviously incidental or ancillary to the main activity of spreading message of Saibaba and not to any business as such even without profit motive and it is in a way a means to achieve the object of the Trust through which message of Saibaba is spread. It is clear from the Trust Deed and objects contained therein that it was not established with an intention of carrying on the business/occupation of selling or supplying goods. This being the position, it cannot be said that the Trust carries on the business of selling and supplying goods so as to fall within the meaning of dealer under Section 2(11) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weetmeats and farsan and selling the same, in no way could be termed as an activity ancillary to the main object of the trust, i.e. providing medical aid, education, manage Pyaus, to manage and run Ganesh Bhandar and to provide food, sweetmeats and other delicious food free of charge or at concessional rate. This is not a sale of literature or other material having any bearing on the teaching and message of somebody as revered as Saibaba. It is a proper commercial activity and aimed at garnering revenue. It is now established and is in place under the distinctive name and style. The sale of sweetmeats, farsan to general public cannot be equalled with a activity noticed by the Hon'ble Supreme Court and associated with Saibaba and his followers. 25. In that view of the matter, it is required to be held that the activity of manufacture of farsan and sweetmeats is a 'business' activity within the meaning of section 2 (5-A) of the Bombay Act and the assessee is required to be registered as dealer and as such is liable for the tax. We are fortified in our view, in view of the law laid down by the Division Bench of the Karnataka High Court, in the matter of M/s Manipal Univ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersity. Merely because, the University was established for imparting education does not mean that it is not indulging in the business so as to make profit out of the sale of prospectus and application forms. Their intention to make profit is clear from the facts and figures placed on record. In the said judgment, the Division Bench considered the judgment of the Apex Court in the matter of Commissioner of Sales Tax vs. Sai Publication Fund (cited supra) and has noted that there was a profit motive on the part of the University and the activity of the University is that of business. 26. It is also required to be noted that even if the main object of the trust in the present case is not a business, the connected incidental or ancillary activity of manufacture of farsan and sweetmeats, could not normally be termed as 'business', unless the very conduct of the assessee if analyzed independently, the intention that could be gathered is to conduct the business in carrying out the incidental or ancillary activity. In our opinion, the Revenue has rightly discharged its burden by bringing on record from the observations made herein above, that the activity of the assessee tru ..... 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