CHAGLA, C.J. - This is a reference made to us under section 23 of the Bombay Sales Tax Act and it raises a rather interesting question as to what exactly is the connotation of the expression "business of selling or supplying goods" used in section 2(c) of the Act.

The facts necessary for the determination of that question have been submitted to us in the statement of the case as required by the section. The facts are brief and simple. The Ahmedabad Education Society has as its objects the spread of education, the making of education accessible to all sections of the people, starting and taking over Arts Colleges, and other similar objects, and in furtherance of these objects the society wanted to put up buildings for colleges and residential quarters for the staff and hostels for students. They gave a contract for the construction of these buildings to Messrs Gannon Dunkerley & Co., Ltd. The society then realised that it would be cheaper and more economical to have a brick factory of their own for the purpose of preparing bricks which could be used for the construction of the buildings and therefore they set up a brick factory in 1946, and also for a similar purpose they set up lime kilns in 1948. They found that the price of brick was Rs. 48 per thousand in the market and by reason of setting up this brick factory and lime kilns the cost of bricks to them was only Rs. 38 per thousand. They supplied these bricks to their contractors, Messrs. Gannon Dunkerley & Co. They manufactured more bricks than were actually necessary for their own construction work and there was a surplus and it is found as a fact that there was a danger of these bricks deteriorating and therefore they had to be disposed of, and they were disposed of from time to time either to sister educational institutions and in some cases also to individuals. But they were disposed of at cost price and no profit whatever was made by the society. The society also obtained a permit from Government to import steel, again for the purpose of their buildings, and after the steel had arrived the Government gave them a permit to buy steel locally, with the result that the society did not require the steel which had been imported and the Controller of Steel directed them to sell the steel which they had imported to other persons requiring steel. Here again, this particular activity did not result in any profit to the society. The society, in view of the fact that it was asked to submit accounts under section 15 of the Sales Tax Act, made an application under section 19 for the determination of the question as to whether the society was a dealer. The Assistant Collector held that the society was a dealer, that decision was confirmed in appeal by the Collector of Sales Tax, but in revision the Sales Tax Tribunal came to the contrary conclusion. Thereupon the State of Bombay asked for a reference to this Court under section 23 of the Act and the reference has now come before us.

The two relevant provisions of the Act which we have to consider are the definitions of "dealer" and "sale". The definition of "dealer" is to be found in section 2(c) :

"'Dealer' means any person who carries on the business of selling or supplying goods in the State of Bombay, whether for commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells or supplies goods to its members."

And "sale" is defined in section 2(g) as meaning :

"'Sale' with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or other valuable consideration but does not include a mortgage, hypothecation, charge or pledge."

It is clear from the definition of a dealer that it is not merely the act of selling as defined in the Act which constitutes a person a dealer. The activity which the person must indulge in is not merely the activity of selling in the sense of tran