Case: Commr. Of S.T Vs. Sai Publication Fund

the assessee (the respondent herein) is a Trust created by four devotees of Saibaba of Shridi under a trust deed dated 6.8.1984. The object of the Trust is to spread message of Saibaba of Shridi. 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 goes to the Trust and forms part of the property of the Trust, which can be utilized 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 Sansthanam of Shridi3. In order to avoid any controversy relating to leviability of sales tax on the amount received on sale of such publications, an application was made by the Trust under Section 52(1)(a) of the Act seeking determination of the questions whether the Trust could be said to be carrying on business as defined in Section 2(5A) of the Act and whether it could be considered as a dealer within the meaning of Section 2(11) of the Act. The Deputy Commissioner of Sales Tax by his order dated 28.9.1989 held that the activity of publication and sale of books etc. amounted to business falling within the ambit of Section 2(5A) and the Trust was a dealer coming within the meaning of Section 2(11) of the Act. Consequently, he held that the Trust was liable to pay sales tax on the value of publications sold by it. What weighed with the Deputy Commissioner in passing the said order was the amendment of the definition of business in Section 2(5A) of the Act by the Maharashtra Tax Laws (Levy, Amendment & Repeal) Act, 1989 with retrospective effect from 16.8.1985 to provide that even without profit motive, it can still be business4. In the appeal filed before the Maharashtra Sales Tax Tribunal against the said order of the Deputy Commissioner, it was contended on behalf of the Trust that it was not a dealer within the meaning of Section 2(11) of the Act as it was not engaged in any activity which amounted to business in view of the object and activities of the Trust. The Revenue supported the order of the Deputy Commissioner relying on the amendment of the definition of business as a result of which profit motive was immaterial. The Tribunal, after due consideration of rival submissions looking to the object of the Trust and the nature of its activities, concluded that the assessee could not be held to be a dealer and as such no tax could be levied on the amount received by it from the sale of its publications5. At the instance of the Revenue, reference was made under Section 61(1) of the Act by the Tribunal to the High Court for its opinion on the following question: Whether on the facts and circumstances of the case and correct interpretation of the provisions of the Bombay Sales Tax Act, 1959, as amended by Maharashtra Act No. 9 of 1989, dispensing with the profit motive from the concept of the business was the Tribunal justified in holding that the respondent is not a dealer qua its activities of publication and sale of books, booklets and allied publications including photos and strikers?6. 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. Hence, the present appeal by the Revenue.

Court's reasoning:
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, when 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 that in order to hold a person to be a dealer, he must carry on business and then only he may also be deemed to be carrying on business in respect of transaction incidental or ancillary thereto. We have stated above that the main and dominant activity of the Trust in furtherance of its object is to spread message. Hence, such activity does not amount to business. Publication for the purpose of spreading message is incidental to the main activity which the Trust does not carry as business. In this view, the activity of the Trust in bringing out publications and selling them at cost price to spread message of Saibaba does not make it a dealer under Section 2(11) of the ActIt may be stated that the question of profit motive to nor profit move 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 present case irrespective of the profit motive, it could not be said that the Trust either was dealer or was carrying on trade, commerce etc. The Trust is not carrying on trade, commerce etc., in the sense of occupation to be a dealer as its main object is to spread message of Saibaba of Shridi as already noticed above. Having regard to all aspects of the matter, the High Court was right in answering the question referred by the Tribunal in the affirmative and in favour of the respondent-assessee. We must however add here that whether a particular person is a dealer and whether he carries on business, are the matters to be decided on facts and in the circumstances of each case18. For what is stated above, we answer the question set out in the beginning in the negative and in favour of the respondent-assessee and dismiss the appeal finding no merit in it but with no order as to costs. Civil Appeal No. 1716 of 199919. The impugned order was passed by the Tribunal relying on the judgment of the Bombay High Court in the case of Sai Publication Fund impugned in abovementioned C.A. No. 9445/96. The learned counsel also submitted that the result of this appeal depended on the decision in said C.A. No. 9445/96 as the facts and circumstances of both the cases are similar.