1. This petition is for a direction to the respondent State to forbear from assessing the petitioner to sales tax in respect of two bronze casts, one of Mahatma Gandhi, and the other named 'Triumph of Labour' which the petitioner made and supplied, the former to the Government of West Bengal at a cost of Rs. 60,000 and the latter to the Government of .Madras at a cost of Rs. 41,000. For the year 1958-59, the Deputy Commercial Tax Officer, Saidapet, called upon the petitioner to furnish a return of his gross turnover and his accounts. The petitioner disclosed the transactions in relation to the two statues but averred before the Deputy Commercial Tax Officer that he was neither a dealer nor the transactions were sales for the purpose of the Madras General Sales Tax Act, 1939. The petitioner also stated that if at all, the transactions amounted to works contract not involving any element of taxable sale. The Deputy Commercial Tax Officer by his notice dated 28th April, 1960, intimated the petitioner that the work he had undertaken was not works contract but the transactions attracted liability to sales tax. The officer also gave his view that the two bronze casts sold by the petitioner had market value, apparently meaning they were just like other marketable goods. He proposed to assess him to tax, therefore, on the total turnover of Rs. 1,01,000 and called upon him to file his objections to the proposal. It was, in such circumstances, the petitioner moved this Court under Article 226 of the Constitution.
2. Mr. G. Ramanujam, learned counsel for the petitioner, urges that the view of the Deputy Commercial Tax Officer, as mentioned above, is wrong and cannot be supported. The learned counsel says that the petitioner in relation to the two transactions could hardly be regarded as a dealer as defined in the Act, nor the transactions be supposed to be sales again as defined. It is further contended that, in any case, the two transactions are no more than works contract not liable to tax.
3. It is not in dispute that the petitioner is a well-known sculptor, artist and painter. It is stated in the affidavit in support of the petition, that till recently the petitioner had been the Principal of the Government School of Arts, Madras, and that after his retirement, at the request and persuasion of some of his admirers, he had been preparing some statues as desired by them on a fixed remuneration. The agreement pertaining to the bronze cast 'Triumph of Labour' was between the petitioner on the one hand, and the Governor of Madras on the other, the purport of which was that the petitioner undertook to make and supply the bronze cast, 'Triumph of Labour' at a cost of Rs. 41,000. The petitioner himself was to find the material for making the cast. This bronze cast 'Triumph of Labour' is a piece of art, and is such that its value is entirely based on its art, and not on the comparatively infinitesimal value of the material including the metal that went into the work. It is not also the case of the respondent that the, 'Triumph of Labour', made for it by the petitioner, is in the nature of an ordinary article displayed or generally available for sale in a market. In fact, the 'Triumph of Labour', it is common ground has not and can have no general market for it. It is a thing of art, special taste and out of the ordinary. So too, is the statue of Mahatma Gandhi made and supplied by the petitioner to the West Bengal Government. The statue is valuable for the art rather than for the material used for the cast and is not one again such as sold in a market, or for which one can find a ready purchaser, having regard to the particular size (double the life size of Gandhiji), value, and the rare and costly art bestowed on it.
4. A dealer is denned by Section 2(b) of the Madras General Sales Tax Act, 1939, to mean any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment or for other valuable consideration. What is important to note, in this definition, is that it is not any person who sells or buys that becomes a dealer. It is only when a person enters into in a commercial sense as in trade or business that he can properly be described as a dealer within the definition. The transactions should essentially be commercial as suggested by the words, 'business of buying, selling, supplying or distributing goods.' This requisite of commercial sense of the dealings has been carried also into the concept of sale as defined by the Act. Section 2(h) defines a sale :
'Sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, and includes also a transfer of property in goods involved in the execution of a works contract....
5. This definition in fact makes it even clearer than the definition of a dealer that it is only when the sales or purchases are effected by one in the course of a trade or business that they become sales chargeable to sales tax. Sales which do not answer that description will not be sales for purposes of the Act.
6. Can it be said, in this case, that the petitioner in supplying the two pieces of sculpture effected sales of them, in the course of trade or business in such casts In my opinion, the answer must clearly be in the negative. The petitioner is a sculptor of repute and according to him, in his affidavit, he does not even pursue the profession as such of a sculptor. After his retirement, in order to satisfy his admirers, he utilises his skill as a sculptor and produces objects of special art, for supply to those who have a taste and value for them. The two casts, in this case, are clearly not articles of commerce or trade. He does not make such casts for purposes of finding a market therefor in general, The requirement of the definition of a dealer, namely, that it must be in the course of business or trade is obviously not satisfied by the two transactions.
7. In cases like these, as. it seems to me, one or two general tests to find out whether the transactions sought to be taxed are in the course of trade or business and amount to sales for purposes of the Madras General Sales Tax Act, 1939 or 1959, may perhaps be thought of. There may be a great painting which may be worth several thousands of rupees on account of the special art, beauty and conception. In such a case the value being not for the paper or canvas but for the art, this may serve as a test of the painting being a product of artistic skill or genius free from commercial approach. Another test, or way of looking at the problem, may be to see whether the articles produced has such a general market or it will be useful or valuable only to the person who places an order for its production. Judged from those tests, and there may be other tests, I think, the two bronze casts supplied by the petitioner were certainly not the subject-matter of sales as such, as defined under the Act. Both on this ground and on the ground that the contracts entered into for their production and their supply were not in the course of trade or business of the petitioner, I hold that the petitioner, in respect of these transactions, was not a dealer and that the two transactions were not sales within their relative definitions in the Madras General Sales Tax Act, 1939.
8. The learned Additional Government Pleader contends that no prohibition should issue from this Court, at this stage. He says that it is too early for this Court to interfere because the Deputy Commercial Tax Officer concerned must be left to decide, in the first instance, whether the transactions were taxable and the petitioner was a dealer in respect of them. I would have been disposed normally to have accepted this contention but for the fact that in his notice proposing to assess, which I have already referred to, the Deputy Commercial Tax Officer clearly evinced his intention to proceed with the assessment, regarding the petitioner as a dealer and the transactions as sales chargeable to tax. In view of that, there is no point in the contention that the Deputy Commercial Tax Officer must be allowed to proceed in the matter and judge for himself, in the first instance. It is next argued for the respondent that the terms of the contract particularly those which provide 'that the sculptor shall duly prepare the design for the pedestal for placing the statue thereon for which no charges shall be payable by Government to the sculptor and the Government shall at its own cost and expense direct and construct the pedestal at the site selected by them within the City of Madras, and that the sculptor shall arrange for the transport of the statue from his studio to the place of installation and have it fixed over the pedestal both done at Government expense' would suggest that the transactions amounted to sales. I am unable to accept the contention. Whether the transactions amounted to sales within the definition of the Act would have to be decided with reference to the terms in which a dealer has been defined and a sale has been defined by the Act. The primary element which, as I said, is lacking is the trade or commerce aspect in the transactions.
9. In the view I have taken on the question whether the petitioner is a dealer and whether the transactions amounted to taxable sales, it is unnecessary to consider the other point urged for the petitioner, namely, that in any case, the contracts in effect were no more than works contracts.
10. The petition is allowed and the rule nisi is made absolute. No costs.