Dealer status for hospital canteen operators depends on commercial supply of food and drinks for consideration, not restricted premises alone.

Supplying prepared food and drinks for consideration in a hospital canteen amounted to carrying on business and attracted the statutory definition of "dealer" under the Andhra Pradesh General Sales Tax Act, 1957. The restricted location, fixed rates, and contractual conditions on cleanliness and service did not change the essential commercial character of the activity. As the proprietor was entitled to the profits and was not merely an agent or trustee, the turnover remained assessable to sales tax. The challenge to jurisdiction failed and the assessment was upheld.

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Issues: Whether the proprietor of a canteen run in the hospital premises for supply of food and drinks to staff and students at fixed rates was a "dealer" carrying on business within the meaning of section 2(e) of the Andhra Pradesh General Sales Tax Act, 1957, so as to render the turnover assessable to sales tax.

Analysis: The activity of supplying prepared articles of food and drink for consideration involved labour, attention and an element of trade, and therefore amounted to business. The fact that the canteen operated under permission, within the hospital premises, to a restricted class of consumers and under conditions as to cleanliness and pricing did not alter the essential character of the activity. The proprietor, being the sole owner entitled to the profits of the undertaking, could not be treated as an agent or trustee merely because the business was conducted under an agreement with the hospital authorities. On the accepted facts, the transactions remained those of a business dealer liable to assessment.

Conclusion: The petitioner fell within the statutory definition of "dealer" and the assessment to sales tax was valid. The challenge to jurisdiction failed.

Final Conclusion: The writ petition was dismissed and the sales tax assessment was upheld.

Ratio Decidendi: A person who carries on the business of supplying prepared food and drink for consideration, even within restricted premises and subject to contractual conditions, is a dealer if he is the proprietor entitled to the profits of the undertaking.

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