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The Deputy Commissioner, Commercial Taxes Vs. Carriage Works Canteen, Southern Railway - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Case No. 128 of 1962 (Revision No. 51)
Judge
Reported in[1963]14STC654(Mad)
AppellantThe Deputy Commissioner, Commercial Taxes
RespondentCarriage Works Canteen, Southern Railway
Appellant AdvocateG. Ramanujam, Adv. for ;Gonernment Pleader
Respondent AdvocateV. Thyagarajan, Adv. for ;B.T. Seshadri, Adv.
DispositionSuit dismissed
Cases ReferredGannon Dunkerley and Co. v. Stale of Madras
Excerpt:
- - , held that a 'business' for the purpose of the madras general sales tax act should be understood in a commercial sense with a view to make profit and where such an element is absent, the relevant definitions of 'dealer' and 'sale' would not be satisfied. we must interpret the words of the statute as they stand and not on the basis of any imagined purpose which the legislature intended to enact, but which apparently they failed to enact......statutory duty imposed upon it by the factories act to provide foodstuffs to its workers on a non-profit basis, the tribunal came to the conclusion that a business which has no profit motive as its basis cannot be regarded as a business for the purpose of the sales tax act and that a person who carries on such an activity cannot be regarded as a 'dealer' carrying on business.2. we are unable to agree with the learned government pleader that the view of the tribunal is in any way erroneous. though the tribunal does not refer to any other decided case except sree meenakshi mills ltd. v. state of madras [1954] 5 s.t.c. 291 on the point, we may refer to a couple of recent decisions rendered by a single judge of this court. in integral coach factory canteen v. deputy commercial tax officer,.....
Judgment:
ORDER

Srinivasan, J.

1. The State is the petitioner and the revision is directed against the order of the Sales Tax Appellate Tribunal, holding that the sale of foodstuffs by the Carriage Works Canteen, Southern Railway, Perambur, is not in the course of business, thereby making the Canteen a 'dealer' within the meaning of the Madras General Sales Tax Act. On the admitted position that the Carriage Works Canteen of the Southern Railway was under a statutory duty imposed upon it by the Factories Act to provide foodstuffs to its workers on a non-profit basis, the Tribunal came to the conclusion that a business which has no profit motive as its basis cannot be regarded as a business for the purpose of the Sales Tax Act and that a person who carries on such an activity cannot be regarded as a 'dealer' carrying on business.

2. We are unable to agree with the learned Government Pleader that the view of the Tribunal is in any way erroneous. Though the Tribunal does not refer to any other decided case except Sree Meenakshi Mills Ltd. v. State of Madras [1954] 5 S.T.C. 291 on the point, we may refer to a couple of recent decisions rendered by a single Judge of this Court. In Integral Coach Factory Canteen v. Deputy Commercial Tax Officer, [1962] 13 S.T.C. 827 Veeraswami, J., held that a 'business' for the purpose of the Madras General Sales Tax Act should be understood in a commercial sense with a view to make profit and where such an element is absent, the relevant definitions of 'dealer' and 'sale' would not be satisfied. That was a case where the assessee was also statutorily obliged to run a canteen for the benefit of its workmen on an entirely non-profit basis. The principle of that decision was again followed in Soundarapandian and Bros. v. Deputy Commercial Tax Officer, [1962] 13 S.T.C. 870 The assessee in that case was a plantation owner, and was supplying food-grains to the labourers as an amenity without any profit motive. The facts herein are more or less identical to those in Gannon Dunkerley and Co. v. Stale of Madras [1954] 5 S.T.C. 216. Here again the learned Judge (Veeraswami, J.) took the view that the business on non-profit lines took the activity outside the scope of the expression 'business'.

3. Mr. Ramanujam for the department draws our attention to the definition of the expression 'business' in the 1959 Act. 'Business' has been defined herein as to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern. He argues that this definition should therefore be so construed as to mean that the Legislature had in mind the exclusion of profit motive, so that even a business conducted with a non-profit motive would yet be a 'business' for the purpose of the Sales Tax Act. This argument was also advanced before Veeraswami, J., in the two cases referred to above and did not win his approval. Nor are we able to see that the wording which has been employed in this particular definition is capable of the construction which the learned Government Pleader seeks to place upon it. It is true that even under the old Act where 'business' was not denned, business was always held to mean a course of activity engaged in with a profit motive. What Mr. Ramanujam says is that there was no need to enact any definition of 'business' in the new Act unless it was the intention of the Legislature to mean that the profit motive was to be excluded. We are unable to agree. We must interpret the words of the statute as they stand and not on the basis of any imagined purpose which the Legislature intended to enact, but which apparently they failed to enact.

4. The petition is without substance and is dismissed with costs. Counsel's fee Rs. 100.


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