Dealer status and business character: temple prasadam supply held not to amount to taxable business activity.

Liability to purchase tax under the Tamil Nadu General Sales Tax Act turned on whether a temple's preparation and supply of panchamirtham prasadam amounted to business by a dealer. The Court applied the settled principle that dealer status requires activity with the character of commercial business, not merely incidental receipts. As the temple's dominant object was religious and charitable, and the prasadam supply and purchase of jaggery were only incidental to worship and distribution, the activity was not trade or commerce. Collection from devotees did not change that character. The temple was therefore outside the taxing provisions, and purchase tax on jaggery used for prasadam was not leviable.

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Issues: Whether the temple, in preparing and supplying panchamirtham prasadam to devotees and purchasing ingredients such as jaggery for that purpose, was carrying on business as a dealer so as to attract purchase tax under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: Liability under the Act depended upon whether the assessee was engaged in a commercial venture amounting to business and therefore answered the statutory description of a dealer. The Court applied the settled principle that a person or cannot be treated as a dealer unless the activity has the character of business in a commercial sense. On the facts, the temple's dominant object was religious and charitable. The supply of panchamirtham was only incidental to worship and prasadam distribution, and the purchase of ingredients such as jaggery was only for preparing that prasadam. The activity was not a trade or commerce undertaken for business purposes, and the assessee did not cease to be outside the taxing provisions merely because consideration was collected from devotees in the course of supplying prasadam.

Conclusion: The temple was not a dealer and was not carrying on business within the meaning of the Act; purchase tax on jaggery for prasadam was not leviable, and the assessee succeeded.

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