Case: Joint Director of Food, Vishakhapatnam Vs. State of Andhra Pradesh

2. Our Constitution mandates on the State welfare activism and contemplates its undertaking distribution of commodities essential to the life of the community at large through trade and business directly organised or in other suitable ways. Foodgrains and fertilisers are strategic items and the Union of India has, in fulfilment of high governmental functions, been procuring these vital goods and selling them to the States or their nominees so as to ensure equitable supplies and price discipline. Pursuant to this commendable programme the Central Government constructed an infra structure and, pertinent to our purpose, appointed, inter alia, a Joint Director of Food stationed in the port town of Visakapatnam. This Officer sold, for the price fixed by his government, food grains and fertilisers to the Andhra Pradesh State and other States. These transactions, in the language of sales tax law, fell within the twin categories ofte sales. A vigilant States Sales Tax Officer directed the filing of returns by the appellant under the Andhra Pradesh General Sales Tax Act, 1957 (Act VI of 1957 for short the State Act) and the Central Sales Tax Act, 1956 (for short the Central Act). This was complied within six returns for the span of three years but was coupled with a plea of immunity from tax on grounds which will be presently discussed. The adverse fate of these contentions at the hands of the Sales Tax Officer and the appellate officer eventuated in further appeals to the Tax Tribunal. The three appeals covered by the Central Act were remanded for the narrow purpose of determining the presence of profit motive in the Central Government while undertaking these dealings as that element is decisive of the appellant being a dealer doing business and therefore liable to tax under the Central Act. The other three appeals were duly dismissed and these successive defeats notwithstanding, the Central Governments Joint Director moved the High Court in all the six cases. Undaunted by discomfiture there, the appellant has arrived here, discretion not being the better part of valour even where public money is involved.

Reasoning: 7. We may hasten to mention that the ordinary concept of business has the element of gain or profit whose absence negatives the character of the activity as business in section 2(b) of the Central Act. A person becomes a dealer only if he carries on business and the Central Government can be designated as dealer only if there is profit motive. This question not having been investigated by the fact finding authorities has been directed to be gone into by the Tax Tribunal in the three cases revolving round the Central Act. So far as the State Act is concerned, this question does not arise for the straight forward reason that the definition in section 2(1) (bbb) of that Act expressly includes within the concept of "business" any trade or any adventure or concern in the nature of trade or commerce carried on or undertaken whether or not with a motive to make gain or profit and whether or not any gain or profit accrues therefrom. Profit making in the State Act, it was conceded by counsel for the Union, was irrelevant in contrast to its pertinence in the Central Act. If this be the correct position in law, it follows that the State Sales Tax Officer is entitled to collect sales tax from the appellant in regard tosales even assuming that there is no profit motive or profit accrual. The reverse is the case so far as Central sales tax is concerned.8. In the result the orders passed by the Sales Tax Appellate Tribunal in all the six appeals, affirmed as it were by the High Court, are correct and these appeals deserve to be dismissed.9. We are conscious of the social implications of sales tax being leviable on essential commodities like foodgrains and fertilisers. Both these items are vital to the common man and his fragile budget. Any tax, especially on food, casts an extra burden on the poor who are the ultimate consumers of the article and victims of the impost. But this socially desirable objective can surely be achieved by appropriate notifications and, if need be, necessary legislative direction. The Court has to interpret the law and apply it. The State, through its agencies makes the law for socially beneficial ends. It is not for the former to salvage the latter from the legal coils which are its own handwork. We make these observations lest it should be felt that judicial construction has contributed to extra food tax. The blame, if any, must belong to the authors of the law.