The respondent assessee was a trust created by some devotees of Saibaba of Shirdi with an object of spreading message of Saibaba. In furtherance and to accomplish this object, the trust published some books, pamphlets and other literature containing such messages and sold them at nominal price to recoup only cost. The sale proceeds go to the trust in form part of the trust property to\u00a0\u00a0\u00a0\u00a0\u00a0 be utilised only for furthering the objects of the trust. There was a specific clause\u00a0\u00a0 in the Trust Deed that if the Trust is unable to carry out its specific objects, the balance funds of the Trust would be returned to Shirdi Sansthanam. The Trust sought determination of the question under section 52(1)(a) of the Act from the Commissioner whether it is a \u201cdealer\u201d and it carries on \u201cbusiness\u201d as defined under the Act. The Deputy Commissioner of Sales Tax\u00a0 held that the Trust was\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 a \u201cdealer\u201d and was carrying on \u201cbusiness\u201d to the extent of such publication and\u00a0 sale of books and other literature, in view of the amended definition of \u201cbusiness\u201d w.e.f. 16-08-1985.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/strong><\/p>\n View<\/strong><\/p>\n The main object of the Trust is spreading messages of Saibaba which is charitable in nature and does not amount to \u201cbusiness\u201d as can be inferred from the Trust\u00a0 Deed and object clause therein. The activity of publishing literature containing such message is only ancillary or incidental to the main activity and does not amount to \u201cbusiness\u201d unless an independent intention to carry on business can be<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n established. The onus to prove such intention lies on the department who alleges that it is business activity. The definition of \u201cdealer\u201d in section 2(11) presupposes that the person carries on \u201cbusiness\u201d. If the main activity is not business, then incidental activity also cannot be business and such person cannot be held as \u201cdealer\u201d.<\/p>\n The question of profit motive or no profit motive would arise only if the person carries on an activity in the nature of trade, commerce, manufacture or adventure in the nature of trade or commerce. In case of the present Trust,\u00a0 the activity did\u00a0 not amount to \u201cbusiness\u201d irrespective of profit motive. However, the Court noted that whether a person is a \u201cdealer\u201d or carries on \u201cbusiness\u201d has to be examined\u00a0\u00a0\u00a0\u00a0 on the facts of each case and no general conclusion can be drawn.<\/p>\n State of TN v. Board of Trustees of the Port of Madras <\/em><\/strong>was referred to drive\u00a0 home a point that \u201cbusiness\u201d is a term normally used in taxing statute to denote occupation, profession which occupies time, labour and attention of a person, normally with a profit motive and with a degree of continuity and not just for \u00a0sport or pleasure. The expression \u201ccarrying on business\u201d means more than just buying and selling the goods. The volume, frequency, continuity and regularity\u00a0\u00a0\u00a0\u00a0 of transactions in a class of goods, ordinarily with a motive to earn profit, decide whether a person is carrying on business or not. Even if profit motive is statutorily excluded from the definition of \u201cbusiness\u201d, yet the person could be doing business.<\/p>\n The case of State of Bombay v. Ahmedabad Education Society <\/em><\/strong>was also considered. The main object of the society in that case was to establish a college and spread education. For\u00a0 the\u00a0 purpose, it had\u00a0 to\u00a0 construct a\u00a0 building. It established a brick kiln for use in construction. The scrap of the bricks and surplus quantity was sold by it at cost price. It was held that society was notdoing \u201cbusiness\u201d qua the sale of bricks but the said activity was just incidental to the main object which was not \u201cbusiness\u201d. Many other decisions e.g. Giridharilal Jivanlal v. CST, Tirumala Tirupati Devasthanam, v. State of Madras, State of\u00a0 TN v. Cement Research Institute of India, Indian Institute of Technology v. State of UP <\/em><\/strong>etc. were discussed and finally the Court concluded that the main activity must be \u201cbusiness\u201d in order to make the ancillary\/incidental activities as \u201cbusiness\u201d unless it is established that such activities were actually carried out as business. [CA Nos. 9445 of 1996 and 1716 of 1999 dt. 22-03-2002]<\/p>\n \u00a0<\/p>\n Editorial <\/em><\/strong>:The term \u201cbusiness\u201d is defined under section 2(17) of the CGST\/ SGST Act. The clause (a) thereof states that \u201cany trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n it is for a pecuniary benefit\u201d is business and clause (b) states that \u201cany activity\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 or transaction in connection with or incidental or ancillary to sub-clause (a)\u201d is\u00a0 also business. The definition indicates that the main activity must amount to business in order to make the incidental activity also a business. The condition\u00a0\u00a0\u00a0\u00a0 of profit motive is excluded but basically the activity must be in the nature of\u00a0 trade, commerce, manufacture etc. Thus, the ratio of above judgment may be applicable to GST as well but the issue needs to be contested before appropriate forum. The impact of exemption notifications under Central Tax\u00a0 (rates) may also\u00a0 be considered whiledeciding the liability under the CGST Act.<\/p>\n \u201cBefore the throne of the Almighty, man will be judged not by his acts but by his intentions. For God alone reads our hearts.\u201d<\/em><\/p>\n – Mahatma Gandhi<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" Bombay sales tax Act , 1959
\nS. 2(11): Dealer – Business – Trust – Sale of books, booklets, pamphlets, photos, stockers and other publications containing the message of Sai Baba – Trust is held to be not dealer \u2013 Whether a particular person is a dealer or\/and whether he carries on business are the matters to be decided on the facts and circumstances of each case [S. 2(5A), 2(19), 3]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-12971","post","type-post","status-publish","format-standard","hentry","category-gst-law"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3nd","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=12971"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12971\/revisions"}],"predecessor-version":[{"id":12972,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12971\/revisions\/12972"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=12971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=12971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=12971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}