COMMISSIONER OF SALES TAX versus SAI PUBLICATION FUND

Citation: [2002] 2 S.C.R. 743 · Decided: 22-03-2002 · Supreme Court of India · Bench: SHIVARAJ V. PATIL · Disposal: Dismissed
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Judgment (excerpt)

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COMMISSIONER OF SALES TAX 
A 
v. 
SAi PUBLICATION FUND 
MARCH 22, 2002 
[SHIVARAJ V. PATIL AND BISHESHWAR PRASAD SINGH, JJ.) 
B 
Bombay Sales Tax Act, 1959-Sections 2(5A) as amended by 
Maharashtra Tax Laws (levy, Amendment and Repeal) Act, 1989, 2(I1) and 
3-Sales Tax-Levy of-On publications sold by Trust with the object to spread C 
messages ofSaibaba-Held, Tax not leviable-Since the sale by the Trust was 
ancillary and incidental to the main object, the same would not amount to 
"business" and thus would not make the Trust a 'dealer'. 
Evidence Act, 1872-0nus of Proof-For establishment of fact that 
incidental and ancillary activities of assessee was with independent intention 
to carry on "business "-Held, it is on the revenue-Bombay Sales Tax Act, D 
1959-Section 2 (5A) as amended by Maharashtra Tax Laws (levy, Amendment 
and Repeal) Act, l 989. 
The issue for decision in the present appeals was whether the 
respondent-Trust set up by devotees of Saibaba of Shridi for spreading his E 
messages could be held to be a 'dealer' in respect of sale of books, booklets, 
pamphlets, photos, stickers and other publications containing messages of 
Saibaba and the turnover of such publication could be assessed to sales tax 
under Bombay Sales Tax Act, 1959 . 
Dismissing the appeals, the Court 
F 
HELD: 1. The respondent-Trust cannot be held to be a dealer in respect 
of sale of books, booklets, pamphlets, photos, stickers and other publications 
containing messages of Saibaba and turnover of such publication cannot be 
assessed to sales tax under Bombay Sales Tax Act, 1959. [745-B; 754-D) 
G 
2. It cannot be said that the Trust carries on the business of selling and 
supplying goods so as to fall within the meaning of "dealer" under Section 
2(11) of the Act. From the combined reading of Section 3, 2(5A) and 2(11) of 
the Act, it follows that the tax under the Act is leviable on the sales or 
purchases of taxable goods by a "dealer" and not by every person. In the H 
743 
744 
SUPREME COURT REPORTS 
[2002] 2 S.C.R. 
A present case the sole object of the assessee Trust is to spread the message of 
Saibaba of Shridi. The main activity does not amount to 'business'. The 
activity of publishing and selling literature, books and other literature is 
obviously incidental or ancillary to the main activity Qf spreading message of 
Saibaba and not to any business as such even without profit motive and it is 
in a way a means to achieve the object of the Trust through which message 
B ofSaibaba is spread. If the 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 the incidental or ancillary 
activity is established. In such cases, the onus of proof of an independent 
intention to carry on "business" connected with or incidental or ancillary sales 
C will rest on the Department The Revenue neither contended nor proved that 
in sale of publications the Trust had an independent intention to do business 
as incidental or as an ancillary activity. (749-A, B, C, D, F; 751-CJ 
D 
State of T.N and Anr. v. Board of Trustees of the Port of Madras., [1999) 
4 sec 630, relied on. 
Board of Revenue and Ors. v. A.M Ansari and Ors., (1976] 3 SCC 512 
and New Delhi Municipal Council v. State of Punjab and Ors., [1997] 7 SCC 
339, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9445 of 
E 1996. 
F 
From the Judgment and Order dated 17.2.95 of the Mumbai High 
Court in S.T.R. No. 15 of 1992. 
WITH 
C.A. No. 1716 of 1999. 
S.K. Dholakia·and S.V. Deshpande, for the Appellant. 
G 
Joseph Vellapally, U.A. Rana, Ashish Dholakia and Prashant Bezboruah, 
for Mis. Gatrat and Co. for the Respondent In C.A. No. 1716/99. 
Shyam Mudaliar for U.U. Lalit for the Respondent in C.A. No. 9445/ 
96. 
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The Judgment of the Court was delivered by 
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1 
COMMISSIONER OF SALES TAX l'. SAi PUBLICATION FUND [SHIVARAJ V. PATIL, J.) 745 
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SHIVARAJ V. PATIL, J. 
A 
CIVIL APPEAL NO. 9445 OF 1996 
In the light of the contentions raised and submissions made on behalf 
of the parties, the issue that arises for consideration and decision in this 
appeal is whether the Trust - Sai Publication Fund, which has been set up by B 
some devotees of Saibaba of Shridi for spreading his message, can be held 
to be a "dealer" in respect of sale of books, booklets, pamphlets, photos, 
stickers and other publications co
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