Research institution not treated as dealer where products sold were generated only through research activity.

A research institution whose objects were confined to scientific research was not treated as a dealer merely because raw materials purchased for research were used to produce cement that was later sold. The sales arising from research activity were held not to amount to trade or commerce, and the mere charging or payment of excise duty did not establish a business character. On that basis, the institution was not carrying on business within the meaning of section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, and the purchase turnover was not liable to purchase tax under section 7-A.

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Issues: Whether a research institution consuming raw materials for research and selling the resulting products was carrying on business as a dealer within the meaning of section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, and whether the purchase turnover was exigible to purchase tax under section 7-A of that Act.

Analysis: The institution's objects were confined to research and scientific work, and the raw materials were purchased only for consumption in research activities. The resulting cement was produced in the course of those activities and its sale did not amount to trade or commerce. The mere charging or payment of excise duty could not, by itself, establish that the institution was carrying on business or that the sales were commercial in character. The legal position applied was that an organisation constituted solely for research does not become a dealer merely because products generated during research are sold.

Conclusion: The institution was not a dealer, its activities did not amount to business within section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, and the purchase turnover was not liable to tax under section 7-A; the revisions failed and were dismissed.

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