Law:

Section:

Section 3, read with section 2(5A) and 2(11), of the Bombay Sales Tax Act, 1959 - Incidence of tax - Whether if main activity is not business, then any transaction incidental or ancillary would not normally amount to 'business' unless an independent intention to carry on 'business' in incidental or ancillary activity is established - Held, yes - Sole object of assessee-trust was to spread message of Saibaba of Shirdi - Books, literatures, etc., containing messages of Saibaba were published and distributed by trust to devotees at cost price - Whether activity of publishing and selling literatures was merely incidental or ancillary to main object which being devoid of any profit motive would not amount to 'business' and it could not be said that assessee-trust carried on business of selling and supplying goods so as to fall within meaning of 'dealer' under section 2(11) - Held, yes - Whether, as a result, assessee-trust would not be liable to pay sales tax - Held, yes FACTS The assessee-trust was created with sole object to spread message of Saibaba. In furtherance of and to accomplish the said object, the assessee published books, pamphlets and other literatures containing the message of Saibaba which were available to the devotees of Saibaba at cost price. The sale proceeds of such publications went to the trust and formed part of the property of the trust to be used for advancement of the objects of the trust. The Dy. Commissioner held that the activity of publications and sale of books, etc., amounted to business falling within the ambit of section 2(5A) and the trust was a dealer coming within the meaning of section 2(11) and the assessee-trust was liable to pay sales tax. On appeal, the Tribunal concluded that the assessee could not be held to be a 'dealer' and as such no tax could be levied on it. On reference, the High Court upheld the order of the Tribunal. On appeal to the Supreme Court : HELD As is evident from section 2(11 ), every person is not a 'dealer' but only those persons 'who carry on the business' by buying or selling goods are regarded as 'dealers'. It follows that a person would not be dealer in respect of the goods sold or purchased by him…

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