1. This is a reference under the Central Sales Tax Act, 1956, which raises the following questions :
'(1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the transactions between the respondent and her customers were not sales of chattel qua chattel and were, therefore, not covered under section 2(g) of the Central Sales Tax Act, 1956
(2) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding the respondent was not a dealer as defined in section 2(b) of the Central Sales Tax Act, 1956 ?'
2. The facts out of which this reference arises are set out in paragraph 3 of the order of the Sales Tax Tribunal dated 14th October, 1964, making the reference. The deceased husband of the respondent used to supply charmed tawiz (amulets) to people in distress, and after the death of her husband, which took place some time in the year 1956, the respondent herself has carried on that business. The procedure adopted by the respondent was that small articles made either of cloth or of metal which were intended to be worn, were taken to one or the other of three Mullas employed by her who used to impart charm to them by reciting prayers from the Koran, and then write some words from the Koran on a slip of paper which used to be placed inside each of those articles of cloth or metal. Those articles were thereafter given by the respondent to people who were in distress, either financially or otherwise, for amounts varying from Rs. 5 to Rs. 25. The respondent also used to advertise in respect of her charmed tawiz in several newspapers. The Sales Tax Officer held that the respondent was a dealer in respect of charmed tawiz and was selling the same, and the respondent was, therefore, taxed under the Central Sales Tax Act, 1956, for the period from 1st of July, 1957, to 30th of June, 1961. On appeal, this view of the Sales Tax Officer was confirmed by the Assistant Commissioner. On a further appeal to the Sales Tax Tribunal, however, that decision was reversed and it was held that the contracts in respect of charmed tawiz between the respondent and her customers were essentially and substantially contracts for the supply of spiritual service for meeting the individual requirements of the customers, and not transactions of sale of chattels qua chattels. At the instance of the Commissioner of Sales Tax, this reference has therefore been made to us.
3. The reference actually raises a very interesting question as to whether the mere fact that an article may not have intrinsic value, but may have a notional value imparted to it, either on the ground of spiritual efficacy or otherwise, would prevent it from being a sale of that article as a chattel, if the assessee in question commercialised in the disposal of that article for a certain amount and actually advertised in respect of the same. We are, however, deprived of the opportunity of deciding that interesting question in view of the fact that the taxing authorities have proceeded before the Sales Tax Tribunal on the undisputed footing that the entire amount that was being charged by the respondent for each of the charmed tawiz was for spiritual services rendered. This is stated in the concluding sentence of paragraph 3 of the Tribunal's order of reference dated 14th October, 1964, as well as in the concluding sentence of paragraph 3 of the Tribunal's judgment dated 14th February, 1964, which gave rise to the present reference. It is stated in paragraph 4 of each of the said orders that that is one of the facts which is 'not in dispute'. Once it is admitted that the respondent is charging only for the spiritual services rendered when she is disposing of the charmed tawiz to her customers, we fail to see how the taxing authorities can contend that such a transaction is sale of the charmed tawiz as a chattel, as has been sought to be contended in the present reference. We must, therefore, answer the questions referred to us as follows :-
Question No. (1) - The Tribunal was justified in holding that the transactions between the respondent and her customers were not sales of chattels, qua chattels, and were therefore not covered by section 2(g) of the Central Sales Tax Act, 1956.
Question No. (2) - The Tribunal was also justified in holding that the respondent was not a dealer as defined in section 2(b) of the Central Sales Tax Act, 1956.
We, however, desire to make it clear that we are not deciding in this reference that contracts relating to the disposal of charmed tawiz or amulets are not contracts of sale, or that persons making such charmed tawiz or amulets are not dealers, but are answering the questions posed on this reference only on the basis of the admission of fact which has been made on behalf of the Commissioner of Sales Tax in the appeal before the Sales Tax Tribunal, to which we have already referred above.
4. The Commissioner of Sales Tax having failed in the reference must pay costs fixed at Rs. 250.
5. Reference answered accordingly.