Charitable hospital medical store not treated as dealer where supply of medicines served its welfare and treatment objects.

A charitable hospital's medical store, operated to supply medicines and equipment to patients as part of its medical research, treatment and welfare objects, was held not to be a dealer under Section 2(10) of the Gujarat Sales Tax Act, 1969. The definition of dealer excludes a charitable institution carrying on manufacturing, buying, selling or supplying goods in performance of its functions to achieve its avowed objects, and the court treated the Gujarat Sales Tax Act and Gujarat VAT Act definitions as materially similar. Relying on the earlier view that such activity is not business activity, the question was answered against the department.

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Issues: Whether the medical store run by a charitable hospital for supplying medicines and equipment to patients is a "dealer" within the meaning of Section 2(10) of the Gujarat Sales Tax Act, 1969.

Analysis: The charitable institution was engaged in medical research, treatment and allied welfare activities, and the medical store functioned as part of those charitable objects. The definition of "dealer" in Section 2(10) excludes a charitable institution carrying on the activity of manufacturing, buying, selling or supplying goods in performance of its functions for achieving its avowed objects. The Court found the relevant statutory definitions under the Gujarat Sales Tax Act and the Gujarat Value Added Tax Act to be materially similar, and the added words in the later enactment did not alter the essential position. The issue was covered by the earlier decision holding that such activity does not amount to business activity.

Conclusion: The medical store was not a dealer within the meaning of Section 2(10) of the Gujarat Sales Tax Act, 1969, and the question was answered against the department.

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