The main legal point established is that for a person to be considered a dealer under the Tamil Nadu General Sales Tax Act, 1959, the activity must be in the course of business, and the main activity must be 'business' for a person to be considered a dealer.

P.JYOTHIMANI, J.

1. The assessee has preferred this revision against the order of the Sales Tax Appellate Tribunal (Main Bench), Chennai dated 17.5.2001 passed in S.T.A.No.55 of 2000, by which the Tribunal has set aside the order of the Appellate Assistant Commissioner and held that the auction sale conducted by the assessee in respect of the gold bullion offered by the devotees to the assessee/ Devasthanam is assessable to sales tax. The revision was admitted on the following questions of law:

"1. Whether the Appellate Tribunal erred in reversing the well considered order of the Appellate Assistant Commissioner (CT) in A.P.No.607/97, dated 29.9.1998?

2. Whether the Appellate Tribunal is right in applying Karnataka Pawn Brokers Association v. State of Karnataka, (1998) 111 STC 752?

3. Whether the Appellate Tribunal erred in not seeing that the appellant is a religious institution?"

2.1. The assessee – Sri Velur Devasthanam of Dharmapuram Adhinam, Nagapattinam District has sold gold bullion offered by the devotees by public auction to the value of ` 11,88,150/-. A notice issued by the Department under the Tamil Nadu General Sales Tax Act, 1959 (for short, "the Act") was objected to by the assessee on the basis that the assessee was not carrying on any business and it is not a dealer and it is a Devasthanam. However, the Assessing Officer has made assessment on the turnover of ` 11,88,150/-, in addition to the additional sales tax.

2.2. Aggrieved by the said order, the assessee filed an appeal before the Appellate Assistant Commissioner, who, by relying upon the judgment in ArulmiguDhandayuthapani Swami Thirukkoil v. Commercial Tax Officer-II, Palani, (1998) 108 STC 114 in respect of a temple offering prasadam to devotees, having found that the dominant activity of the assessee is religious and charitable in nature and not business, has set aside the order of the Assessing Officer.

2.3. Being aggrieved, the State has filed an appeal to the Tribunal. The Tribunal, while setting aside the order of the Appellate Assistant Commissioner, has confirmed the order of the Assessing Officer. A reference to the impugned order of the Tribunal shows that the Tribunal has considered the assessee as a dealer under Section 2(g) of the Act in respect of the auction conducted for the sale of the above said offerings to come to a conclusion that even though it is a solitary transaction, it amounts to business and the assessee should be treated as a dealer. The Tribunal relied upon the judgment of the Apex Court in Karnataka Pawn Brokers Association v. State of Karnataka, (1998) 111 STC 752, wherein it was held that activity of pawn brokers in selling the pledged goods by auction should be treated as a business and they should be treated as dealer and accordingly, tax is liable to be paid. Hence, the assessee has preferred this revision on the above said questions of law.

3. It is the contention of the learned counsel for the assessee that the Devasthanam was constituted as per the scheme framed by the Civil Court with the object of maintaining the temple and, therefore, the sale of offerings made by the devotees is not a commercial activity and it is only incidental to the object, which is religious and charitable. He would also rely upon the judgment in TirumalaTirupati Devasthanam, Tirupati v. The State of Madras and another, (1972) 29 STC 266 (Madras), which has also been referred to by the Apex Court in Commissioner of Sales Tax v. Sai Publication Fund, (2002) 4 SCC 57, and therefore, according to him, the finding of the Tribunal as if the assessee has been carrying on business or as if the assessee is a dealer under the Act is not valid in law.

4. On the other hand, the learned Special Government Pleader would submit that it is well settled law that during the course of business even a solitary transaction can be deemed to be a business transaction and the assessee should be treated as a dealer as per Section 2(g) of the Act