Incidental transactions by a temple do not amount to separate business and are not liable to sales tax.

A religious and charitable temple was not treated as carrying on business for sales tax purposes where its canteen sales to pilgrims, disposal of unserviceable motor parts as scrap, and sale of donated human hair were merely incidental to its main non-commercial objects. The court applied the test whether the transactions had the indicia of an independent commercial venture or were functionally integrated with the institution's religious and charitable activities. Because the canteen served pilgrims at reasonable prices, the scrap arose from maintenance of pilgrim facilities, and the hair was sold for practical and health reasons, none of the activities had a separate business character. The turnover from these transactions was therefore not exigible to sales tax.

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Issues: Whether the temple institution, in respect of its canteen sales to pilgrims, sale of unserviceable motor parts as scrap, and sale of human hair received from devotees, was carrying on business so as to be a dealer liable to sales tax under the Andhra Pradesh General Sales Tax Act.

Analysis: The institution was a religious and charitable temple governed by the endowments legislation, with its principal objects being religious worship, maintenance of pilgrims, and allied charitable purposes. The disputed transactions arose only in the course of providing facilities to pilgrims and in disposing of accumulated unserviceable or donated articles. The governing test was whether the impugned transactions had the indicia of independent business activity or were merely incidental to, and functionally integrated with, the main religious and charitable activity. The canteen was run to supply food and snacks at reasonable prices for pilgrims, the scrap arose from maintenance of transport facilities for pilgrims, and the human hair was periodically disposed of for practical and health reasons. On these facts, although each activity could in isolation resemble a business transaction, none had the character of a separate commercial venture divorced from the institution's dominant religious purpose.

Conclusion: The institution was not a dealer in respect of these transactions, and the turnover from the canteen sales, scrap sales, and sale of human hair was not exigible to sales tax.

Ratio Decidendi: Where a religious or charitable institution carries out transactions that are merely incidental to its main non-commercial objects and are functionally integrated with those objects, such transactions do not constitute a separate business for sales tax purposes unless they exhibit an independent commercial character.

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