JUDGMENT

PATHAK, J. :— These appeals by special leave are directed against the judgment and order of the High Court of Punjab and Haryana dismissing the writ petitions filed by the appellant against proceedings for the assessment of sales tax.

2. The appellant, the Government Medical Store Depot, Karnal, is a Depot functioning under the Assistant Director General (Stores) who is in charge of the Medical Stores Organisation in the country under the Directorate General of Health Services, Ministry of Health, Government of India, New Delhi. It is a department of the Central Government and supplies medicines and hospital equipment manufactured in India or imported from abroad to Government hospitals, Government institutions, Health Centres, Dispensaries and Primary Health Units located in northern India, some of which are run by local bodies such as Panchayats, Panchayat Samitis, Zila Parishads and Municipalities. It does not deal with private hospitals and individuals. The organisation works as a public utility service on a no profit, no loss basis. The medical stores and hospital equipment are purchased by the appellant and supplied to the hospitals and medical institutions, after adding a service charge of 10 per cent on the cost of the indented stores.

3. During the year 1956-57, a question arose whether the activities of the appellant brought it within the definition of the expression dealer as defined in S. 2(d) of the Punjab General Sales Tax Act, 1948. The Excise and Taxation authorities took the view that the appellant was not a dealer because the transactions conducted by it did not include an element of profit. By a letter dated July 15, 1957, the appellant was informed by the Excise and Taxation Commissioner, Punjab, that it need not be registered under the Punjab General Sales Tax Act.

4. On August 21, 1968, the Excise and Taxation Officer, Karnal took note of a decision of this Court in Dy. Commercial Tax Officer, Saidapet, Madras v. Enfield India Ltd., Co-operative Canteen, (1968) 21 STC 317 and called upon the appellant to produce its account books for the years 1965-66, 1966-1967 and 1967-68 for the purpose of assessment to sales tax on the Medical Stores and Equipment supplied by it. The appellant was also directed to get itself registered as a dealer under the Act. The appellant replied on August 24, 1968 that it did not fall within the scope of the definition of dealer, and it seems that the Government of India in the Ministry of Health also intervened in the matter. The Excise and Taxation Officer, however, continued to maintain that the appellant was a dealer within the meaning of the Act.

5. The Excise and Taxation Officer then issued formal notices to the appellant for the production of its account books for the years 1964-65 to 1968-69, and after giving an opportunity to the appellant to be heard, he proceeded to make assessment orders dated March 25, 1970 for the years 1964-65 and 1965-66, and also passed penalty orders for each year under the Punjab General Sales Tax Act as well as under the Central Sales Tax Act. He also initiated assessment proceedings for the years 1966-67, 1967-68 and 1968-69.

6. The appellant filed five writ petitions in the High Court of Punjab and Haryana, challenging the assessment proceedings pertaining to the assessment years 1964-65 to 1968-69 respectively taken under the Punjab General Sales Tax Act and the Central Sales Tax Act. The writ petitions were dismissed by the High Court by a common judgment and order dated Oct. 18, 1976. The High Court held that the appellant was a dealer notwithstanding that it was not carrying on a business for earning profit.

7. Learned counsel for the appellant contends that the appellant is not a dealer because the activity carried on by it is pursued without any motive of earning profit and, therefore, it cannot be described as a business. It is pointed out that the definition of the word dealer in S. 2(d) of the Punjab General Sales Tax Act is dif