SHARMA, J. - Whether Government Medical Store Depot, Karnal (hereinafter referred to as the depot) is a dealer within the meaning of section 2(d) of the Punjab General Sales Tax Act, 1948 (hereinafter referred as the Act) or not is the short point involved in Civil Writ Petitions Nos. 1183, 1184, 1795, 1796 and 1797 of 1970, which are all being disposed of by this judgment.

It is alleged that the depot is functioning under the Assistant Director General (Stores), who is in-charge of Medical Stores Organisation in the whole of India under the Director-General of Health Services, Government of India. Ministry of Health, New Delhi. It is a department of the Central Government and supplies medicines and hospital equipments manufactured in India and 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 self-governing bodies like panchayats, panchayat samities, zila parishads and municipalities. It does not deal with private hospitals and individuals. It is further averred that the organisation is working as a public utility service on "no-profit-no-loss" basis. The medical stores and the hospital equipments are purchased by the depot and supplied to the hospitals and medical institutions mentioned above after adding service charges of 10 per cent. on the cost of indented stores. In the year 1956-57, a question arose whether the activities of the depot had brought it within the mischief of the term "dealer" as defined in section 2(d) of the Punjab General Sales Tax Act, 1948, or not. After a great deal of scrutiny and discussion, it was ultimately ruled by the excise and taxation authorities of the erstwhile State of Punjab that the depot was not a "dealer" in the ordinary course of business of sale and purchase which necessarily implies a profit-motive. It was, therefore, ruled that the depot need not be registered under the said Act. The communication dated 15th July, 1957, addressed by the then Excise and Taxation Commissioner, Punjab, is attached as annexure C to the petition.

On 21st August, 1968, the Excise and Taxation Officer, Karnal, respondent No. 2, relying upon a judgment of the Supreme Court in Deputy Commercial Tax Officer, Saidapet, Madras v. Enfield India Ltd. Co-operative Canteen Ltd. ([1968] 21 S.T.C. 317 (S.C.)), required the petitioner-depot to produce its account books for the years 1965-66, 1966-67 and 1967-68 on 26th August, 1968, for assessing and levying sales tax on the medical stores and equipments supplied by the depot. It was also directed to get itself registered as a dealer under the Act.

The petitioner-depot instead of complying with the direction issued by respondent No. 2, wrote back on 24th August, 1968, that the term "dealer" "did not cover the activities of the depot". On 20th September, 1968, another communication on the same lines was addressed to the Excise and Taxation Commissioner, Haryana, at Chandigarh. The Government of India (Ministry of Health) also intervened in the matter and some other letters were exchanged between the parties. The respondents, however, did not budge from the position that the petitioner-depot was a "dealer" within the meaning of the Act.

On 30th October, 1968, respondent No. 2 issued formal notice in form S.T. XIV requiring the petitioner-depot to produce accounts from 1st April, 1965, to 31st March, 1968, along with complete books of account. In response to the notice the accounts officer of the depot appeared before respondent No. 2 on 18th November, 1968, and gave the figures of sales made by the depot, while still insisting that the depot was not a "dealer" within the meaning of the Act.

On 9th March, 1970, another set of notices was issued by respondent No. 2 in form S.T. XIV calling upon it :

"(a) under the Central Sales Tax Act to produce the account books for the period commencing from 1st April, 1964, to 31st March, 1969, i.e.