NATIONAL PRESS Vs. STATE OF ORISSA

JUDGEMENT

(1.) THESE references have been made by the Member, Additional Sales Tax Tribunal, Orissa, under section 24(1) of the Orissa Sales Tax Act (hereinafter called the Act) referring the following questions for determination of this court :

(2.) THE following are the relevant facts and features appearing in the statement of facts drawn up by the Tribunal. The All Orissa Primary Teachers' Federation (hereinafter called the Federation) is an association registered under the Societies Registration Act (21 of 1860). The objects of the association as available from its memorandum are, inter alia, to unite the teachers working in the primary schools throughout Orissa with a view to fostering a spirit of brotherhood and co-operation; to print and publish journals and reviews and bring out other publications in the general interest of, and to support the cause of, education. The assessing officer being of the view that the business run under the name and style of "Messrs. National Press" owned by the Federation is liable to tax under the Act issued notice under section 12(5) thereof. Accounts were produced which showed that rubber stamps, forms, leaflets, invitation cards, etc., have been sold by the press. Sales were not confined to the members of the Federation but had been freely done to outsiders. Before the assessing officer it was contended that the press was not a dealer and, therefore, it was not liable to be proceeded against under the Act. The assessing officer negatived such contention and on a finding that liability under the Act had accrued, completed assessments for the quarters ending June, 1962, to March, 1965, treating the assessee as an unregistered dealer. The first appellate authority annulled these assessments upon a finding that the Federation as per its constitution and memorandum of association was not intended to be commercial in character and, therefore, in regard to the business run by the press, the activities cannot also be said to be commercial. He further found that there was no profit-motive in the transactions undertaken by the press. The State of Orissa appealed to the Tribunal, and the Member, Additional Tribunal, held :

(3.) EVEN if time is occupied, labour and attention are devoted, the activity in the absence of a profit-motive may not become "business". Bhagwati, C.J., in Commissioner of Sales Tax v. Anil Co-operative Credit Society ([1969] 24 S.T.C. 180), has indicated the unanimous view of the court that profit-motive was essential to make a systematic or organised course of activity a "business". The Calcutta High Court in the case of Indian Iron and Steel Co. Ltd. v. Member, Board of Revenue ([1971] 27 S.T.C. 373), has also taken a similar view. These are cases where in the corresponding State Act, the word "business" by definition is not sans the "profit-motive".