Incidental food supply by an educational institution does not create dealer status or VAT liability.

An educational institution providing boarding, lodging and food to resident students was held not to be carrying on the business of selling food for VAT purposes. The Court applied the statutory definitions of "business", "dealer" and "sale" and found that the institution's dominant activity was imparting education, not trade or commerce. The supply of food was only incidental and ancillary to the hostel arrangement, so it did not convert the institution into a dealer or create taxable business activity. The VAT notices and proposed assessments were therefore without jurisdiction and were quashed.

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Issues: Whether an educational institution that provides boarding and lodging to resident students and supplies food as an incidental facility carries on the business of selling food so as to be a dealer liable to tax on a sale of taxable goods.

Analysis: Liability under the Act arises only where there is a sale by a dealer or a person carrying on the business of taxable goods. The definitions of "business", "dealer" and "sale" require, in substance, a business activity of buying, selling or supplying goods in the course of trade or commerce. The institution's primary and dominant object was imparting education, which is not a trade or business. The provision of food to resident students was only incidental and ancillary to the educational activity and was necessary to make the hostel facility workable. On the settled principle applied by the Court, an incidental supply does not become business when the main activity is not business, and the institution therefore does not answer the statutory description of a dealer.

Conclusion: The supply of food to resident students did not amount to taxable business activity, and the institution was not liable to VAT on that account. The notices proposing assessment were without jurisdiction and were quashed.

Ratio Decidendi: Where the main activity of an institution is not business, an incidental supply made solely to facilitate that main activity does not itself constitute business or make the institution a dealer for tax purposes.

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