Charitable activity and incidental sales do not create dealer status; disputed transactions stayed outside sales tax net.

An activity amounts to business for sales tax purposes only when it involves a profit-motivated, systematic course of dealings in goods. A charitable institution preserving animals was not a dealer because its sales of milk, carcasses and dung were merely incidental to its philanthropic object and did not alter its essential charitable character. Unginned cotton was also outside tax net as agricultural produce grown by personal cultivation. The institution was therefore not liable for registration, and the disputed sales were not taxable under the Bombay Sales Tax Acts.

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Issues: (i) Whether the charitable institution was a dealer within the meaning of the Bombay Sales Tax Acts and liable for registration. (ii) Whether sales of carcasses, unginned cotton, milk and dung as fertilizer were liable to tax under the Bombay Sales Tax Acts.

Issue (i): Whether the charitable institution was a dealer within the meaning of the Bombay Sales Tax Acts and liable for registration.

Analysis: A person is a dealer only if he carries on the business of buying or selling goods. Business in the taxing statutes requires an occupation or activity carried on with a profit motive and a course of dealings showing continuity, frequency and systematic conduct. The institution's essential character was charitable and philanthropic, namely, preservation of the lives of stray and other animals. The sales of milk, carcasses and dung were merely incidental to that object and did not change the nature of the activity into a business. As to unginned cotton, it was agricultural produce grown on land cultivated personally, bringing it within the statutory exception.

Conclusion: The institution was not a dealer and was not liable for registration.

Issue (ii): Whether sales of carcasses, unginned cotton, milk and dung as fertilizer were liable to tax under the Bombay Sales Tax Acts.

Analysis: Taxability depended on whether the institution was carrying on a business of selling those goods. The sales of animal products were only incidental to the charitable activity of maintaining and preserving animals and were not made in the course of a profit-oriented business. The sale of unginned cotton was excluded by the agriculturist exception applicable to produce grown by personal cultivation.

Conclusion: The sales were not liable to tax under either Act.

Final Conclusion: The reference was answered in favour of the assessee, with both substantive questions decided against the State and the institution held outside the taxing net for the disputed transactions.

Ratio Decidendi: For sales tax purposes, an activity amounts to business only when there is a profit-motivated, systematic course of dealings in the goods sold; incidental sales arising from a primarily charitable activity do not make the institution a dealer.

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