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The HC ruled that the petitioner, a charitable hospital, is exempt from tax under the Madhya Pradesh Commercial Tax Act, 1994 for medicine supplies and canteen services. The Court distinguished this case from Cochin Port Trust, noting that unlike Kerala's law which includes persons selling goods "whether in the course of business or not," the MP Act only applies to persons "carrying on business." Following precedents from Gujarat and Kerala High Courts, the Court determined that supplying medicines and operating a canteen for patients' attendants were activities incidental to the charitable hospital's non-business operations, not independent business activities. The Court rejected the respondents' argument that profit generation automatically constituted business activity. Petition allowed.
The HC ruled that the petitioner, a charitable hospital, is exempt from tax under the Madhya Pradesh Commercial Tax Act, 1994 for medicine supplies and canteen services. The Court distinguished this case from Cochin Port Trust, noting that unlike Kerala's law which includes persons selling goods "whether in the course of business or not," the MP Act only applies to persons "carrying on business." Following precedents from Gujarat and Kerala High Courts, the Court determined that supplying medicines and operating a canteen for patients' attendants were activities incidental to the charitable hospital's non-business operations, not independent business activities. The Court rejected the respondents' argument that profit generation automatically constituted business activity. Petition allowed.
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