Statutory canteen sales remain non-taxable where the activity is welfare-driven and not commercial business.

Sales from a factory canteen maintained to satisfy the statutory duty under the Factories Act were not treated as commercial business under the Mysore Sales Tax Act, even after the definition of "business" was enlarged. The removal of profit motive did not eliminate the need for the activity to retain the character of trade, commerce, or an adventure in the nature of trade. Because the canteen operated as a welfare facility for employees on a subsidised basis and not as an independent commercial venture, its sales were not includible in taxable turnover and the assessment orders and demand notices were quashed.

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Issues: Whether the proceeds of sales made through the factory canteen run for the benefit of employees were exigible to tax under the Mysore Sales Tax Act, 1957 after the amendment enlarging the definition of "business".

Analysis: The canteen was maintained pursuant to the statutory obligation under the Factories Act, 1948 and not as an independent commercial venture. The amended definition of "business" in the sales tax law removed the necessity of profit motive, but it did not dispense with the basic requirement that the activity must still be trade, commerce, or an adventure or concern in the nature of trade or commerce. A welfare activity carried on only to satisfy the statutory obligation to provide a canteen, with sales to employees on a subsidised basis, does not become a commercial business merely because goods are sold. The concept of dealer and sale under the Act continues to depend on business in the commercial sense.

Conclusion: The canteen sales were not taxable and were not includible in the taxable turnover. The assessment orders and demand notices based on those sales were liable to be quashed, and the petitions were allowed.

Ratio Decidendi: An amendment that removes profit motive from the definition of business does not make a non-commercial statutory welfare activity into taxable business unless the activity is still trade or commerce in substance.

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