IMPORTANT POINT
Sai Publication Fund which has been set up by devotees of Saibaba of Shirdi for spreading his message, cannot be held to be a dealer in respect of sale of books, booklets, pamphlets, photos, stickers and other publications containing message of Saibaba and the turnover of such publication cannot be assessed to sales tax under the Bombay Sales Tax Act, 1959.

Headnote:Bombay Sales Tax Act, 1959-Sections 2(5A), 2(11)-Sales tax on Sai Publication Fund-Sale of books, booklets, pamphlets, photos, stickers and other publications containing message of Saibaba-Whether turnover of such publication can be assessed to sales tax under the Act?-(No)-Books and literature etc. being distributed by the Trust to devotees at cost price-Primary and dominant activity of the Trust is to spread message of Saibaba-This main activity does not amount to business-Trust held not as a dealer .
       Held : Although the Act provides for levy of tax on the sales or purchases of certain goods in the State of Maharashtra, the levy is restricted only to sales or purchases made by dealers. As is manifest from Section 3 itself, the liability to pay sales tax is only on the dealers. From the combined reading of Section 3, 2(5A) and 2(11) of the Act, it follows that the tax under the Act is leviable on the sales or purchases of taxable goods by a dealer and not by every person. From the facts of the present case, the sole object of the assessee Trust is to spread the message of Saibaba of Shirdi. It is also not disputed that the books and literature etc. containing the message of Saibaba were distributed by the Trust to the devotees of Saibaba at cost price. There is no dispute that the primary and dominant activity of the Trust is to spread the message of Saibaba. This main activity does not amount to "business". The activity of publishing and selling literature, books and other literature is obviously incidental or ancillary to the main activity of spreading message of Saibaba and not to any business as such even without profit motive and it is in a way a means to achieve the object of the Trust through which message of Saibaba is spread. It is clear from the Trust Deed and objects contained therein that it was not established with an intention of carrying on the business/occupation of selling or supplying goods. This being the position, it cannot be said that the Trust carries on the business of selling and supplying goods so as to fall within the meaning of "dealer" under Section 2(11) of the Act. (Para 10)
       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 Act. (Para 11)
       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 case. (Para 17)

JUDGMENT

Shivaraj V. Patil, J.-Civil Appeal No. 9445 of 1996

In the light of the contentions raised and submissions made on behalf of the parties, the issue that arises for consideration and decision in this appeal is whether the Trust - Sai Publication Fund, which has been set up by some devotees of Saibaba of Shirdi for spreading his message, can be held to be a "dealer" in respect of sale of books, booklets, 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 ).

2. 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 Shirdi under a trust deed dated 6.8.1984. The object of the Trust is to spread message of Saibaba of Shirdi. 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 Shirdi.

3. 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 and Repeal) Act, 1989 with retrospective effect from 16.8.1985 to provide that even without profit motive, it can still be "business".

4. 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 publications.

5. 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 pub

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2002 Supreme(SC) 417

Cases Referred (4)