TaxTMI 
TaxTMI 
2002 (3) TMI 45
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....ts, pamphlets, photos, stickers and other publications containing message of Saibaba and the turnover of such publication can be assessed to sales tax under the Bombay Sales Tax Act, 1959 (for short "the Act"). The relevant and material facts, leading to filing of this appeal in brief, are that the assessee (the respondent herein) is a trust created by four devotees of Saibaba of Shiridi under a trust deed dated August 6, 1984. The object of the Trust is to spread the message of Saibaba of Shiridi. In furtherance of and to accomplish the said object, the assessee publishes books, pamphlets and other literature containing the message of Saibaba under the aegis of "Sai Publications" which are available to the devotees of Saibaba on nominal charge to meet the cost. The sale proceeds of such publication go to the trust and form part of the property of the Trust, which can be utilised only for advancement of the objects of the Trust. There is a specific provision in the trust deed that in the event of failure of the Trust to carry on its aims and objects, the remaining fund in its hands would be handed over to the Sansthanam of Shiridi. In order to avoid any controversy relating to le....
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....qua its activities' of publication and sale of books, booklets and allied publications including photos and stickers?" The High Court on consideration of the relevant provisions of the Act, facts of the case and keeping in view the decisions cited, answered the aforementioned question referred by the Tribunal in the affirmative and in favour of the assessee (Commr. of S. T. v. Sai Publication Fund [1995] 98 STC 388 (Bom)). Hence, the present appeal by the Revenue. Shri S. K. Dholakia, learned senior counsel for the appellant contended that the definition of "business" is a wide and inclusive definition. Despite the same, the High Court committed a serious error of law in taking a view that business/activity must still be one which in ordinary connotation is regarded as business; this is clearly against the legislative intent. According to him, on the facts that the Trust purchases necessary material and brings some publications and sells the same when profit motive is immaterial having regard to the amended definition of section 2(5A) of the Act. The learned senior counsel emphasised that the activity of the trust in bringing out publications and selling them is regular, frequent....
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....." "2. (19) 'person' includes any company or association or body of individual whether incorporated or not, and also a Hindu undivided family, a firm and a local authority." "3. Incidence of tax.--(1) Every dealer whose turnover either of all sales or of all purchases, made during (i) the year ending on the 31st day of March, 1981, or (ii) the year commencing on the 1st day of April, 1981, has exceeded or exceeds the relevant limit specified in sub-section (4), shall until such liability ceases under sub-section (3), be liable to pay tax under this Act on his turnover of sales, and on his turnover of purchases, made on or after the notified day:..." The contention that the Trust in question is a "dealer" within the meaning of section 2(11) read with section 2(5A) requires careful scrutiny. As is evident from section 2(11), every person is not "dealer" but only those persons "who carry on business" by buying or selling goods are regarded as "dealers". From the very definition of dealer, it follows that a person would not be a dealer in respect of the goods sold or purchased by him unless he carries on the business of buying and selling such goods. "Dealer" and "person" are sepa....
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....the Act. No doubt, the definition of "business" given in section 2(5A) of the Act even without profit motive is wide enough to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture and any transaction in connection with or incidental or ancillary to the commencement or closure of such trade, commerce, manufacture, adventure or concern. If the main activity is not business, then any transaction incidental or ancillary would not normally amount to "business" unless an independent intention to carry on "business" in the incidental or ancillary activity is established. In such cases, the onus of proof of an independent intention to carry on 'business" connected with or incidental or ancillary sales will rest on the department. Thus, if the main activity of a person is not trade, commerce, etc., ordinarily incidental or ancillary activity may not come within the meaning of "business". To put it differently, the inclusion of incidental or ancillary activity in the definition of "business" pre-supposes the existence of trade, commerce, etc. The definition of "dealer" contained in section 2(11) of the Act clearly indicates t....
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....s' but still the person may be 'carrying on business'." Further in para, 30 of the same judgment, it is stated thus: "30. In our view, if the main activity was not 'business', then the connected, incidental or ancillary activities of sales would not normally amount to 'business' unless an independent intention to conduct 'business' in these connected, incidental or ancillary activities is established by the Revenue. It will then be necessary to find out whether the transactions which are connected, incidental or ancillary are only an infinitesimal or small part of the main activities. In other words, the presumption will be that these connected, incidental or ancillary activities of sales are not 'business' and the onus of proof of an independent intention to do 'business' in these connected, incidental and ancillary sales will rest on the department. If, for example, these connected, incidental or ancillary transactions are so large as to render the main activity infinitesimal or very small, then of course the case would fall under the first category referred to earlier.". In the case on hand, the Revenue neither contended nor proved that in sale of publications the trust had a....
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....iew to doing the business of selling or supplying agricultural produce. According to the assessee, he was principally an agriculturist who also deals in cotton, coal, oil seeds and groundnuts'. He was having agriculture for the purpose of earning income from the fields but there was nothing to show that he acquired the lands with the primary intention of doing business of selling or buying agricultural produce. This decision was approved by this court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Travancore Rubber and Tea Co. [1967] 20 STC 520 (SC), and it was held that where the only facts established were that the assessee converted latex tapped from rubber trees into sheets and effected a sale of those sheets to its customers, the conversion of latex into sheets being a process essential for transport and marketing of the produce, the department had failed to prove that 'the assessee was formed' with a commercial purpose. The Allahabad High Court in Swadeshi Cotton Mills Co. Ltd. v. Sales Tax Officer [1964] 15 STC 505 was dealing with a batch of cases where different bodies were running canteens. One of the cases concerned the Aligarh Muslim University whic....
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....search was sold, it could not be considered to be a trading activity within section 2(d) of the Tamil Nadu General Sales Tax Act, 1959. Again in Tirumala Tirupati Devasthanam v. State of Madras [1972] 29 STC 266 (Mad), the dispute arose with regard to the sales of silverware, etc., which are customarily deposited in the hundis by devotees. It was held by the Madras High Court that the Devasthanam's main activities were religious in nature and these sales were not liable to tax. (No doubt, the case related to a period where the profit motive was not excluded by statute). We are of the view that all these decisions involve the general principle that the main activity must be 'business' and these rulings do support the case of the respondent-Port Trust.". This decision is directly on the point supporting the case of the respondent after noticing a number of decisions on the point including the decisions cited by the learned counsel before us. It may be stated that the question of profit motive or no profit motive would be relevant only where person carries on trade, commerce, manufacture or adventure in the nature of trade, commerce, etc. On the facts and in the circumstances of the ....