Madras High Court
Arulmigu Dhandayuthapani Swami ... vs The Commercial Tax Officer-Ii on 15 September, 1997
Equivalent citations: (1998)1MLJ160
Author: Ar. Lakshmanan
Bench: Ar. Lakshmanan
JUDGMENT AR. Lakshmanan, J.
1. The writ appeal is directed against the order of J. Kanakaraj, J., in W.P. No. 17003 of 1994 dated 29.9.1994 dismissing the writ petition only on the ground that the appellant has got a right of alternative remedy to file an appeal.
2. The appellant filed the writ petition for the issue of a writ of certiorari calling for the records of the respondent in his proceedings T.N.G.S.T. No. 536296/91-92 dated 15.11.1993 and quash the same.
3. The facts and circumstances leading to the filing of W.P. No. 17003 of 1994 are as follows: The appellant is the Devasthanam looking after the Pooja, Seva, etc., of the Deity "Lord Muruga" in the famous temple situated in Palani Hills. That temple from time im-memorial is one of the very important places of wor-ship for the Hindus and famous festivals are conducted by the appellant every year according to the custom prevailing among the Hindus. After the Pooja or Seva performed on the deity, Prasadams are offered to the devotees. One such Prasadam offered by the appellant to the devotees is Panchamirtham, which is very famous and called as "Palani Murugan Pancha-mirtham. " Every devotee who worshipped Lord Murugan at Palani Hills purchase Panchamirtham from the appellant. The Panchamirtham is made out of banana, wet dates, jaggery, cardamom, etc. For this, most of the ingredients are coming to the appellant as offerings to the deity by the worshippers. Only for shortage, the appellant is compelled to purchase the same from the open market and this practice is being followed by the appellant from time immemo-rial. No sales tax was levied either for the abovesaid purchases from the open market or for the sale of the abovesaid Prasatham Panchamirtham in the past years. The Government had also clarified by their letter No. 48529/11-2/79, dated6.5.1992 that the sale of Prasatham by the temples in Tamil Nadu like the appellant is not liable to tax under the Tamil Nadu General Sales Tax Act, 1959. The abovesaid clarification was given by the Government based on the principles laid down by various High courts in many decisions that the activities of the temple cannot be held as business and the temple also cannot be held as a 'Dealer' and hence, there is no element of sale as provided in the Act, to tax the same.
4. In these circumstances and as per the clarification of the Government aforesaid, the sale of Panchamirtham by the appellant is not taxed under the Tamil Nadu General Sales Tax Act, 1959 (here-inafter referred to as the Act) till date. But, a dispute was raised with regard to the levy of tax on the purchase of jaggery (Nattusakkarai) by the appellant through Regulated Market Committee. The respondent sought to levy tax on the purchase of jaggery by the appellant from the Regulated Market Committee for the reason that the commodity in the State and the commodity Cardamom are liable to tax at the point of last purchase in the State. This dispute was raised for the first time during the year 1991-92 by the respondent. The respondent has totally failed to note the fact that the appellant will not at all come within the purview of the Act. The appellant is neither a Dealer for doing any business as contemplated under the Act.
5. Since the respondent sought to levy tax on the appellant's purchase of ingredients for the preparation of the prasadam Panchamirtham, the appellant has approached the Government for necessary relief. But the Government without properly considering the appellant's request and totally on a different footing declined to entertain the appellant's claim of exemption on their purchase of jaggery and other ingredi-ents for the preparation of the Panchamirtham--vide the letter dated 6.7.1992.
6. In the meanwhile, the respondent has passed the impugned order dated 15.11.1993 assessing the appellant on a turnover of Rs. 12,24,217, being the purchase value of jaggery and cardamom, levying tax and other amounts to the tune of Rs. 99,429 and the same was served on the appellant on 4.12.1993. In the meanwhile, the respondent has issued B-6 "notice dated 21.9.1994 to the appellant's bank attaching the alleged arrears due of Rs. 99,429 under Section 26 of the Act and demanded the bank to pay the said amount directly to the respondent from the appellant's account.
7. Therefore, the appellant filed the writ petition challenging the impugned order as invalid, illegal and without jurisdiction for the reason that the appellant is not a Dealer and not carrying on any business as contemplated under the Act. The Government had clarified, following various decisions of various High Courts, that the sale of Prasadam or offerings by the temples in the State are not liable to tax on the ground that the temples are not dealers and they are not doing any business for attraction of tax under the Act. While this being so, the levy of tax on the appellant's. purchase is totally without power and jurisdiction and. is liable to be quashed.
8. During the pendency of the writ appeal, the respondent had issued preassessment notices dated 29.3.1995 for the assessment years 1992-93 and 1993-94 proposing to assess the appellant's purchase turnover of jaggery under Section 7(A) of the Act and also proposed to levy penalty. Since the notices for the assessment years 1992-93 and 1993-94 are totally without jurisdiction and power, the appellant left with no other effective alternative remedy, filed W.P. No. 11894 of 1995 for a mandamus forbearing the respondent from subjecting the appellant/petitioner to assessment under the Act. The writ petition was admitted by this Court on 1.9.1995.
9. The respondent filed a common counter affidavit in the writ petition and also in the writ appeal. According to them, the appellant Devasthanam which is a registered dealer under the Act with effect from 22.8.1991 on the files of the respondent. They filed annual returns in Form-A1 for the year 1991-92 on 22.7.92 showing first purchase of jaggery amounting to Rs. 12,14,217 and stating that jaggery was not for sale but only for use in the preparation of panchamirtham. Though the sales of Panchamirtham was exempted from tax, the ingredients used in its preparation such as jaggery, cardamom etc., are taxable under Section 7-A of the Act. The appellant Devasthanam does not give Panchamirtham fee to the devotees or worshippers but on the contrary, they are with specific charges. Hence, the transactions of sale of Panchamirtham to the devotees are for a valuable consideration in the form of money. As the appellants manufacture and supply of Panchamirtham is only for a specific monetary consideration, their action squarely comes under the definition of "business" which includes any trade or commerce or manufacture, whether or not such trade, manufacture etc., is carried on with a motive to make gain or profit vide Section 2 (d) of the Act. The activity of the appellant can only come under the definition of "Business" "Dealer" and "Sale" as laid down under the Sections 2(d), 2(g) and 2(n) of the Act. The appellants are registered dealer under the Act and by applying for registration under Section 20 of the Act, they were granted registration certificate under the same Act. The appellants who is a dealer duly registered under the act and who have filed Al returns, now cannot turn around and plead otherwise. The exemption is given only for the sales of Panchamirtham, but the exemption is not applicable to the ingredients like jaggery, cardamom etc., The purchase of jaggery though from Regulated Market Committee, is only from, the agriculturists which has not suffered tax at any stage in the State. So, as per Section 7-A of the Act, the purchase tax was levied. Since the appellants have not paid the said tax, surcharge and addl. sales tax to the Government, action was initiated against them.
10. We have heard Mr. V. Ramachandran, learned Se-nior Counsel for the appellant and Mr. T. Mathi, learned Government Advocate (Taxes) for the respondent.
11. Mr. V. Ramachandran, learned senior counsel submitted that the learned single Judge has dismissed the writ petition on the short ground that the appellant has an alternative remedy to challenge the order impugned in the writ petition. According to the learned senior counsel the order of the learned single Judge is not correct since the impugned order has been passed without jurisdiction or authority of law. In fact, the settled provision that the appellant is not a 'Dealer' and they are not carrying on any 'busi-ness' as contemplated under the Act which had been followed by the respondent till the previous assessment year in 1990-91 has been thrown in wind by the respondent herein without adducing any reasons and hence the impugned order is in gross violation of natural justice and totally against the principles laid down by various High Court in various decisions.
12. Mr. T. Mathi, learned Government Advocate ar-guing contra, submitted that the appellant's activities of preparing prasadams and sale at the counter to the devotees will not only constitute a 'sale' as defined under Section 2(n) of the Act but also attract the levy of Sales Tax under the Act.
13. Mr. V. Ramachandran, learned senior counsel for the appellants in support of his contention that the appellant is not a dealer under Section 2(g) of the Act and it is not carrying on any business as defined under Section 2(d) of the Act, cited the following decisions and relied upon the principles laid down by the various High Courts in those decisions:
1. Tirumala Tirupati Devasthanam, Tirupati v. The State of Madras and Anr. 29 S.T.C. 266; 2. Managing Committee, Temple Sri Bankey Behari J.I. v. Commissioner of Sales Tax, U.P. Lucknow, 29 S.T.C. 685; 3. The State of Tamil Nadu v. The Madras Advocates' Co-operative Society Limited, 38 S.T.C. 297; 4. Deputy Com-missioner (C.T.) Coimbatore v. South India Textile Research Association, 41 S.T.C. 197; 5. State of Tamil Nadu v. Indian Officer's Association, 44 S.T.C. 264; 6. State of Andhra Pradesh v. Sri Bhramaramba Mallikarjuna Swamy Devasthanam, Srisailam, 73 S.T.C. 321; 7. C.V. Ramaswamy Gounder Sons v. Deputy Com-mercial Tax Officer, Erode, 77 S.T.C. 58; and 8. Port of Madras v. The State of Tamil Nadu, 1996(10) M.T.C.R. 373 (Mad).
14. The learned single Judge in our view ought to have seen that the appellant is not a dealer and not carrying on any business as contemplated under the Act, and that the appellant cannot at all be assessed under the Act since the appellant will not at all come under the purview of the Act and hence, the order impugned in this writ petition is not valid under law. In these circumstances, the dismissal of the writ petition by the learned single Judge on the ground that alternative remedy is available to the appellant due to the peculiar facts and circumstances of the case, is against the principles of natural justice and therefore, unsustainable. In any event, the learned single Judge ought to have decided the issue on merits and on the basis of the grounds raised in the writ petition.
15. We shall now consider the authority relied on by the learned senior counsel for the appellant, reported in Tirumala Tirupati Devasthanam v. The State of Madras, 29 S.T.C. 266. In the above case, the Devasthanam sold silverwares and other articles in auction held at Madras at the Madras Jewellers and Diamond Merchants' Association and realised large sums of monies from out of such auctions. According to the State, the amount realised in the public auction, being the realisation in such auctions are to be deemed as monies obtained from sale of goods in the course of business of the Devasthanam and consequently the turn over involved in such sales in each of the years attracted sales tax under Section 3(1) of the Act. The Devasthanam was also informed that they ought to have registered themselves as dealers under the Act, and not having done so under the provisions of the Act, the penal provisions of the Act are attracted. The Devasthanam filed written objections. Their further contention was that it was not a com-mercial activity undertaken by them in the course of any business of theirs, and though prima facie a sale, is involved, it is not in connection with the business of the Devasthanam and much less as a dealer under the provisions of the Act. The eminent Judge Ramaprasada Rao, J., after construing the provisions of Section 2(d) and 2(g) held that in order to characterise a person as a dealer, the primary prerequisite is that he should carry on business. In the words of the learned Judge, Such a business may be in myriad ways, such as buying, selling etc. But he should carry on busi-ness before the could be terminologically called a dealer within the meaning of Section 2 (g) of the Act. If a person, therefore, does not carry on busi-ness, he is not a dealer. It is in the perspective of this annotation of these two definitions that the facts in the present case have to be noticed.
The learned Judge has further observed that the Devasthanam besides being a charitable institutions, is a Hindu institution of age old antiquity, which has gained importance for the way in which the Devasthanam is functioning and propagating the Hindu Religion and serving the needs of those who often visit the Hills for getting the darshan of the Lord, and that the hundi collections form an asset of the devasthanam which they utilise for the purpose of propagating the religion and for serving the various objects for which the Devasthanam has been founded. It therefore, becomes necessary for the Devasthanam to convert such valuable metals which find their place in the hundi into cash, so that such cash may be utilised for the objects for which the institution has been founded and for which it is existing. The learned Judge has further held as follows:
It is with this sole and unambiguous object in view that the Devasthanam auctions such valuable metals such as silver etc., at appointed places according to their discretion, and secure their money equivalent in public auctions held for the purpose. It is difficult to hold the view that that in such cases, where the Devasthanam justifiably disposes off the metallic substances or metallic goods in their custody the same being the realisations in the hundi, either by private negotiation or by public auction, it could be said that the Devasthanam was doing a business or was indulging in a commercial activity, though not for a profit-motive. Business, which is intricately connected with commerce, is unknown to the Devasthanam, and it is impossible to conceive that while they dispose of their articles of silver etc., found in the hundi, they were doing a business.
16. In the decision reported in Deputy Commissioner of Commercial Taxes v. Sri Thiru Magal Mills Ltd., 20 S.T.C. 287, a Division Bench of this Court has observed that unless a transaction is connected with trade, that is to say, it has something to do with trade or has the incidence or elements of trade or commerce, it will not be within the definition of 'business' in the Madras General Sales Tax Act, 1959 as amended by Act. 15 of 1964.
17. In the decision reported in Managing Committee, Temple Sri Bankey Behari J.I. v. Commissioner of Sales Tax, U.P. Lucknow, 29 S.T.C. 685, the assessee, the managing committee of a temple, looked after the pooja of the deity installed in the temple. The assessing authority assessed tax on the turn over of the Bhog. The Appellate Authority set aside the order of the Assessing Authority and recorded a finding that the primary object of the managing committee of the temple was to provide for the worship of the deity. It was only incidental to that object that the worshippers were required to make an offering of the bhog prepared in the bhog bhandar of the temple. The devotees or the worshippers were desirous of offering bhog to the Deity and accepted whatever prasad was offered to them by the poojari. The temple did not carry on the business of selling sweetmeats. In revision, the revising authority reversed the order of the appellate authority and restored the order of the Sales Tax Officer, but did not upset the findings of fact recorded by the appellate authority.
18. On a reference to the High Court it was held, (1) that the proper and reasonable inference to be drawn from the finding of the appellate authority was that the worshipper or the devotee made a cash offering to the Deity and in return got prasad from the pujari. That was the true substance of what happened in the temple and there was no sale of bhog;
(2) that the assessee was not a dealer within the meaning of Section 2 (c) of the U.P. Sales Tax Act, 1948, and it did not carry on the "business" of selling bhog. The word "business" in Section 2 (c) connotes a commercial activity, but in the present case there was no commercial activity at all.
19. In the decision reported in Deputy Commissioner (C.T.,) Coimbatore v. South India Textile Research Association, 41 S.T.C. 197 rendered by M.M. Ismail, J., as he then was, and Sethuraman, J., there was no controversy that the purchase of cotton was only for the object of consuming it in the process of research it carries on. The yarn which is produced in the process is broken, unwound and entangled in the course of testing process and is disposed of as such. For improving productivity and quality, the respondent undertook testing and analysis of the sample and en-couraged the membermills. The respondent also assisted such membermills in the design and lay-out of the laboratory as well as in the selection of appropriate instruments. The question which came up for consideration before the Division Bench was whether the purchase of cotton by the respondent and the sale of cotton yarn and cotton waste resulting out of the research, which the respondent carries on with the cotton purchased by it, would constitute sales liable to tax under the Act. The Tribunal came to the con-clusion that the respondent was no engaged in the carrying on of any business and therefore, the purchase of cotton and the sale of cotton yarn and cotton waste could not be brought within the scope of the taxing provisions of the Act. The correctness of this conclusion was challenged in the tax revision cases before the Bench. The Bench held as follows:
Where an organisation constituted solely and exclusively for the purpose of carrying on research, the purchase of products by that organisation for the purpose of carrying on its research and the sale of the resulting products by that organisation cannot be said to be in the nature of trade or commerce so as to bring it within the definition of the term 'business' contained in Section 2(d) of the Tamil Nadu General Sales Tax Act, 1959, and, therefore, cannot be brought within the scope of the taxing provisions of the Act.
20. In the decision reported in The State of Tamil Nadu v. Indian Officers' Association, 44 S.T.C. 264 rendered by Sethuraman and Balasubramanyan, JJ., the question that arose before the Bench was, whether the Indian Officers Association, which was running a hostel to the inmates of the hostel following dividing system come within the meaning of 'Sale' under the Act and that the Association was liable to sales tax. The Indian Officers Association, consisting of the officers of the State and Central Government and also quashi-government employees, was running a hostel in order to accommodate the children undergoing education in Madras of Government servants who were working outside Madras. The sales tax authorities rejected the claim of the Association for exemption from sales tax in respect of the turn over of the mess in the hostel for the years 1966-67 and 1971 -72 on the ground that the inmates of the hostel were not members of the Association. The Tribunal came to the conclusion that the inmates of the hostel were following a dividing system, that they had formed themselves to be a separate group, which did not have a separate existence from its members, and that, therefore, there was no sale within the meaning of the Act, and the Association was not liable to sales tax. On a revision before this Court, a Division Bench has held as follows:
Even assuming that the association itself was running the hostel, in providing an amenity in the shape of food for the children or the students drawn from the family members of the association, no sale was involved as the family was being treated as a unit for the purpose of the asso-ciation and it was a case of mutual help. Even on the basis that the inmates themselves were conducting the hostel by adopting the dividing system, the position would be a fortiori as except for the provision of accommodation, the association did not do anything more. The organisation of a mess by the students themselves and dividing the expenditure among themselves was purely in the nature of mutual service and amenity provided by a group of persons for themselves and there was no element of sale in such a case as well. Even if the association had been maintaining the accounts as a book-keeper for the purpose of finding the total expenditure incurred and then dividing it among the students, it would not make any difference as to the character of the amenity provided by the students for themselves on the application of the principle of mutuality. The Tribunal, therefore, came to the right conclusion.
21. In the decision reported in The State of Tamil Nadu v. The Madras Advocate Co-op. Society Ltd. 38S.T.C. 297 rendered by V. Ramaswami, J., as he then was, and V. Sethuraman, J., the facts are the Madras Advocates Co-op. Society was supplying food and drinks to its members on non-profit basis. They were run-ning restaurant for the benefit of its members on a non-profit basis. The said society was assessed to sales tax on the ground that it was effecting sale of food and refreshments. The claim of the assessee that it was not taxable under the Act as it was neither a dealer nor doing any business and its transactions did not amount to sales was negatived by the assessing authority and the Appellate Assistant Commissioner. The Tribunal found that the assessee was supplying tiffin and refreshments only to its bona fide members and that it was not effecting any sales and it was not a dealer under the Act. On a revision to this Court, a Division Bench held that there was no sale of any refreshments by the assessee and, therefore, the assessee was not liable to sales tax. The Bench has further held that in the case of a members' club, even though it is a distinct legal entity, it is acting only as an agent for its members in the matter of the supply of various preparations and articles to them and therefore, there is no element of transfer in such supplies and no sale is involved.
22. The decision reported in State of Andhra Pradesh v. Sri Bhramaramba Mallikarjuna Swamy Devasthanam, 73 S.T.C. 321 is a judgment rendered by a Division Bench of the Andhra Pradesh High Court holding that if the dominant activity of an institution, such as a religious or charitable institution, is not a business activity, but if the secondary activity has the elements of commerce or trading activity, then in order to claim exemption from tax, it must be established that it forms an integral part of the main activity. The Bench has further held that the main activity of the respondent/Devasthanam was neither commercial nor trading in nature, and the incidental activity of running a canteen for the pilgrims, although of a business nature, was for the supply of foodstuffs to visiting pilgrims at reasonable prices, which was functionally integral to the main activity. The sales of food in the canteen were, therefore, not liable to tax. The Bench has also observed that the respondent ran motor vehicles for extending transport fa-cilities to the pilgrims at reasonable rates. It was in-evitable that unserviceable motor parts had to be disposed of as scrap, as retention would cause problems of storage and hygiene. Though in isolation this activity constituted a business activity, as far as the respondent was concerned, it partook of the character of functional integrality and the turnover relating to it had to be exempted. Likewise, the human hair, offered by pilgrims to the temple in fulfilment of vows, was sold by the respondent to avoid storage and health problems. The activity was not commercial and no tax was, therefore, exigible on it.
23. The decision reported in C.V. Ramaswami Gounder Sons v. Deputy Commercial Tax Officer, 77 S.T.C. 58 was rendered by S.A. Kader, J., In that case, the petitioner firm carried on a commission agency in turmeric. The agriculturists in surrounding areas brought their produce of turmeric to be stored in the firm's godowns. Receipts were issued by the firm for the turmeric. The firm had no right to sell the turmeric and it was the responsibility of the agricultur-ist to decide the price. From time to time, auctions were held in the premises of the marketing committee, at which the turmeric was sold on the basis of samples taken from the stock in the firm's godowns. The highest bid had to be accepted by the agricultur-ist. The goods were then sold in specified quantities after weighment. The price was received by the Com-mission agent and after deducting storage, labour, weighment and other charges, the balance was paid to the agriculturist. The sales tax authorities assessed the petitioner firm to sales tax for the assessment year 1986-87. In a writ petition challenging the assessment, the petitioner contended that it was not a dealer. The High Court held that the petitioner-firm had no hand in the determination of the price or in the sale of the goods stored in its godowns by the agricultur-ists. The agriculturists themselves sold the goods to the highest bidder. The petitioner only acted as an intermediary, and delivery the goods to the purchaser after the sale was completed, received the price, de-ducted its charges and paid the balance to the agriculturists. The petitioner was, therefore, not a dealer within the meaning of Section 2(g) of the Act and was not liable to be assessed to sales tax.
24. A very recent decision of our High Court reported in The Board of Trustees of the Port of Madras v. The State of Tamil Nadu (1996) 10 M.T.C.R. 373 rendered by K.A. Swami, C.J., and one of us (AR. Lakshmanan, J.) can be usefully noticed and the principles laid down therein be applied to the case on hand. The Division Bench on an elaborate consideration of the decisions cited before it and after considering the nature of duties to be discharged and the services rendered by the Port Trust, came to the conclusion that in none of the duties discharged and services rendered by the Port Trust, there is an element of trade or business. The Bench has also held that in order to hold that an association or an institution or an individual dealing with goods as a dealer it/he must deal with them as a trader or business man on a commercial basis and that the venture must be a commercial venture. The conclusions arrived at by the Bench are as follows:
In order to attract this provision, it is necessary that one must carry on the business of buying, selling, supplying or distributing goods either as a factor, a broker, a commission agent or arhati, a del credere agent or an auctioneer, or any other mercantile agent, on behalf of any principal, or through whom the goods are brought, sold, supplied or distributed, whereas it has been pointed out in the earlier decision and is also clear from the provisions of the Major Port Trusts Act that the Port Trust is not carrying on the auction sales either as a principal or as a factor, a broker, a com-mission agent or arhati, a del credere agent or an auctioneer, or any other mercantile agent. It only performs the statutory functions in bringing those articles for sale as provided under the statue. That position is not changed. The Major Port Trusts Act has not been amended so as to change the very character and nature of the activities of the Port Trust, so as to make it a commercial or a business venture or so as to bring the Port Trust in line with the Railways, which is held to be a commercial organisation. Therefore, we find it very difficult to agree with the learned single Judge that the amendment has taken away the effect of the decision in State of Madras v. Trustees of Port of Madras, 34 S.T. C, 135 Unlike the Rail-ways, which is carrier of goods, under Section 43 of the Major Port Trusts Act, the Port Trust is a statutory bailee of the goods. All the services per-formed/tendered by the Board and enumerated in Section 42 of the Major Port Trusts Act attract the payment of statutory dues as provided for in the Trusts Scale of Rates framed under Section 48 of the Major Port Trusts Act and such scales of rates have been declared to have the force of law. As regards the periodic and irregular 'sale of scrap and unserviceable goods belonging to the Trust' conducted by the trust, the port trust will not come under the ambit of the expression 'dealer', because it does not do it as a business or as a trade and it is done in the course of rendering of service to the Port owners as well as the maintenance of the Port Trust... The question is not one whether any profit accrues or not from the functions or the activities carried on by the Port Trust. The question is one as to the nature of the duties re-quired to be discharged and the services rendered by the Port Trust. In none of the duties discharged and services rendered by the Port Trust, there is an element of trade or business. Therefore, we are of the view that as the provisions of the Major Port Trusts Act and the Tamil Nadu General Sales Tax Act stand today or stood on the date when the notice was issued to the Port Trust, the Port Trust cannot be directed to be registered as a 'dealer'. If that be so, it cannot be held that it is bound to furnish the details of auction sales held, for the purpose of making a demand.
25. The judgments above referred to have application to the case on hand. In the instant case, the appellant is looking after the Pooja of the deity in the temple. After the pooja is performed on the deity, Prasadams are offered to the devotees. On such Prasadam offered by the temple to the deities is Panchamirtham, which is popularly known as Palani Murugan Panchamirtham. For the preparation of the said Prasadam, the ingredients like banana, jaggery, cardamom are required. It is the specific case of the appellant that most of the ingredients are coming to the temple as offerings to the deity by the devotees. Only for the shortage, the temple is compelled to purchase from the open market and this practice is being followed by the appellant from time immemo-rial. No sale tax was levied either for the abovesaid purchase from open market or for the sale of the Prasatham Panchamirtham in the past years. The Government had also clarified by their Letter No. 48520/11-2/79, dated 6.5.1982 that the sale of Prasadams by temples in Tamil Nadu are not liable to tax under the Act--The abovesaid clarification was given by the Government based on the principles laid down by various High Courts in various decisions that the activities of the temple cannot be held as business and the temple also cannot be held as busi-ness and the temple also cannot be held as a dealer and hence there is no element of sale as provided under the Act to tax the same.
26. The facts and circumstances would, disclose that the appellant is neither a dealer nor doing any busi-ness and hence there is no question of levy of tax on the purchase of jaggery by the appellant which is used for preparing the prasadam. The sale of Panchamirtham Prasadam was not a commercial activity undertaken by the appellant in the course of any business of theirs and though prima facie a sale is involved, it is not in connection with the business of the appellant and much less as a dealer, the pri-mary prerequisite is that he should carry on busi-ness within the meaning of the Act. If a person does not carry on business, he is not a dealer. The business which is intricatedly connected with commerce is unknown to the appellant and therefore it is impossible to conceive that while the appellant sell Panchamirtham to the devotees who come to the temple, the appellant is doing a business. The object of the appellant is something very different doing business. When the appellant, whose laudable objects have already been enumerated, sold some Prasadams like Panchamirtham to the devotees, which is purely incidental, it cannot be said that the appellant is indulging in business in a commercial sense. The domi-nant activit of the appellant is religious and charitable in nature and not a business activity.
27. For the foregoing reasons, the writ appeal and the writ petition are allowed. However, there will be no order as to costs. While admitting the writ appeal, the Bench granted interim stay on condition that the appellant furnishes bank guarantee for the entire amount to the satisfaction of the respondent. Now that the writ appeal is allowed, the bank guarantee if any furnished by the appellant, shall stand cancelled, and the monies, if any, recovered by way of sales tax, shall be refunded to the appellant immediately.