M.H Kania, J.:— This is a reference under section 61(1) of the Bombay Sales Tax Act, 1959 (hereinafter referred to as “the said Act”).

2. The facts giving rise to this reference are as follows: One Cutchi Dasha Oswal Mahajan is a public charitable trust registered under the Bombay Public Trust Act, 1950. This trust conducts an institution known as Udyog Griha, whose affairs were managed by the respondent, which is a committee of the said trust. This committee was started mainly with the object of providing employment to the poor and distressed women of the said community, who have no source of income.

3. In order to provide maintenance to such women, the respondent employed them for preparing eatables. These articles were sold and the money realised was given to the destitute women employed by the respondent. From the judgment of the Tribunal it appears that the surplus amount out of the said realisations was utilised by the respondent for extending its activities so that more destitute women of the community could get relief. It is common ground that the eatables prepared in the Udyog Griha were sold like any other articles in the market and not necessarily at a concessional rate or at the cost price. It has been found by the Tribunal that the main object of the trust was to ameliorate the living conditions of the poor and destitute women of the said community, viz., cutchi dasha oswal caste. The respondent made an application on 10th October, 1968, under section 52 of the said Act requesting the Commissioner of Sales Tax to determine whether the Gnati Mahajan was a dealer and whether the supply of the goods by the Udyog Griha amounted to a sale. The Deputy Commissioner of Sales Tax came to the conclusion that the activity of preparing eatables was with a view to earn profit and the purpose for which the profit was utilised was not relevant. He held that as the respondent had not sold the eatables at a subsidised rate but according to the trade practice and profits had been made continuously for the previous four years, the respondent was a dealer, and as the turnover of purchases and sales had exceeded the prescribed limits, the respondent was liable for registration under the said Act. The respondent filed an appeal against this decision before the Sales Tax Tribunal being Appeal No. 14 of 1969. The Tribunal took the view that as the main object of the said trust was to ameliorate the living conditions of the poor and destitute women of the community and as the said trust was registered as a charitable trust for this purpose, the activity which the trust had undertaken to do through the respondent could not be described as a commercial activity of sale. The Tribunal accepted the conclusion of the Deputy Commissioner of Sales Tax that there was surplus resulting from the activity of sale of the eatables and also that the eatables prepared were sold in the market like any other articles and not at any concessional rate. The Tribunal, however, held that the surplus which resulted to the respondent from these sales could not be termed as profits in the commercial sense, because that surplus was utilised to extend similar activities so that the living conditions of a larger number of poor and destitute women of the community could be ameliorated. The Tribunal further held that it was not the intention of the charitable institution to carry on the business of selling edible articles and the profits made as aforesaid were incidental. The Tribunal set aside the order of the Deputy Commissioner of Sales Tax and held that the respondent was not liable to be registered as a dealer under the said Act. This reference has been made at the instance of the Commissioner of Sales Tax against this decision of the Tribunal. The question referred to us for our consideration is as follows:

“Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in coming to the conclusion that the respondent is not a dealer within the meaning of section 2(11) of the Bombay Sales Tax Act, 1959?”

4. The definition of the term “dealer” contained in section 2(11) of the said Act makes it clear that in order to be considered as a dealer, a person must be carrying on the business of buying or selling goods in the State. There is no dispute that in order to be considered as a dealer, the person concerned must not merely be buying or selling goods or both but doing so as a business. The submission of Mr. Cooper, the learned counsel for the applicant, is that in the present case, the respondent was getting eatables prepared by the poor and destitute women of the community and was selling them in the market like any other commercial articles. It was submitted by him that this activity must be considered to be a business and the fact that the profit realised therefrom was utilised for a charitable purpose was of no consequence. In appreciating the contention of Mr. Cooper one cannot lose sight of the fact that the findings of the Tribunal clearly show that in the case before us the charitable purpose, which was one of the main purposes of the said trust and for the carrying out of which the respondent committee was formed, was to ameliorate the living conditions of the poor and destitute women of the community. It was in the carrying out of that purpose that the respondent employed poor and destitute women of the community and got eatables prepared by them. These eatables had necessarily to be sold, and the surplus realised was again utilised for carrying out that very purpose, viz., of getting employed a larger number of destitute women of the community with a view to give them maintenance. It is, therefore, not a case where a charitable trust has undertaken an activity of a commercial nature, which is not an activity directly in furtherance of the purposes of the charitable trust, and has merely utilised the profits realised from such activity for carrying out its objects. In the case before us, it is the carrying out of one of the main objects or purposes of the trust which has resulted in the profits being made and these profits have again been utilised in the furtherance of that purpose. In this connection, it may be useful to refer to the decision of the Supreme Court in State of Andhra Pradesh v. Abdul Bakshi & Bros. [1964] 15 S.T.C 644 S.C. The observations of the Supreme Court in this decision show that to regard an activity as business there must be a course of dealings, either actually continued or contemplated to be continued with a profit-motive, and not for sport or pleasure. By the use of the expression “profit-motive”, their Lordships have clarified, it was not intended that profit must in fact be earned. It predicates a motive which pervades the whole series of transactions effected by the person in the course of his activity.

5. In State of Gujarat v. Surat Panjarapole [1966] 23 S.T.C 57., a similar question came up for consideration before a Division Bench of the Gujarat High Court. The assessee, the Surat Panjarapole, was a public charitable institution founded with the object of keeping and preserving the lives of stray dogs, stray cattle and other stray animals. The assessee had agricultural lands which it cultivated personally through its servants and sold the cotton grown on those lands. The assessee also sold the carcasses of animals dying in the institution, milk from the pedigree cattle and the dung for use as fertilizer. It was held by the Division Bench that the assessee was actuated entirely by a charitable or religious or philanthropic motive and it did not carry on any business activity with any profit.-motive; and merely because incidental sales were done of the animal products, it could not be considered as carrying on the business of selling those goods. Hence it was not a dealer within the meaning of section 2(11) of the said Act. It has been pointed out by the Division Bench that it was in the course of carrying out of the purpose of the institution that such animals were kept and, incidentally, the institution sold the animal products like milk, carcasses of dead bodies and the cow-dung. This activity can never amount to a business activity carried on with a profit-motive which would change the essential character of the philanthropic activity or charitable activity of the institution so as to convert it into a business activity.

6. In our view, the aforesaid principle laid down by the Gujarat High Court, with which we are in respectful agreement, is directly applicable to the case before us. As we have already pointed out, the profits have resulted to the respondent in the course of carrying out an activity in direct furtherance of the main purpose of the trust. In these circumstances, the sale transactions, which resulted in these profits, must reasonably be regarded as incidental transactions and these transactions would not convert the activity of getting the eatables prepared and sold into a business activity.

7. Reference may also be made, in this connection, to the decision of a Division Bench of this Court in V.K.S.V Sangh Ltd. v. State of Maharashtra. The question in that case was whether the applicant, a society registered under the Bombay Co-operative Societies Act, 1925, could be considered to be a dealer within the definition of the said term under, section 2(11) of the said Act. The object of the applicant-society was to transport fish belonging to the members of the society from fishing centres to the market and vice versa. For the purpose of transporting fish, the society had to maintain a fleet of transport vehicles and, for preserving the fish in the course of transport, the society used to purchase ice, and the members, whose fish was transported, were charged for the quantity of ice required in respect of their baskets of fish. For the year 1959-60 the purchase of ice by the society was of the value of Rs. 20,534, while the society received from its members a sum of Rs. 32,819 for the supply of ice. It was, inter alia, held that the business of the applicant-society was to transport fish belonging to its members and it supplied ice only for the purpose and in the course of carrying on that business. It could not be said that the society supplied ice to its members with the intention of carrying on business in ice and, therefore, the society was not a dealer within the definition of that term in section 2(11) of the said Act in regard to the supply of ice by it to its members. In the case before us also, we are of the view that the eatables were got prepared and sold by the respondent not with the intention of carrying on business in the preparation and sale of these eatables, but in the carrying out of the main object of the trust, viz., to give employment to the destitute women of the community for whose benefit the trust was founded and, hence, the respondent cannot be regarded as a dealer within the meaning of the said term in section 2(11) of the said Act in connection with this activity.

8. Strong reliance was placed by Mr. Cooper on the decision of the Madras High Court in Commissioner of Commercial Taxes v. Evangelical Literature Service. The assessee in that case, the Evangelical Literature Service, purchased Bibles and other Christian literature at a discount and sold them at the price marked in the books, thereby making a profit which was utilised for the propagation of the objects of the assessee and dissemination of Christian literature. It was held that the aim of the assessee-society in buying and selling the books was to make a profit and that alone was material for the purpose of assessment to sales tax and it ought not to be confused with the ultimate object of the society which was to propagate Christian literature and the assessee was, therefore, liable to sales tax. In our view, this decision must be distinguished from the case before us. In that case, the ultimate object of the assessee was to propagate Christian literature. The findings of fact, however, clearly show that the aim of the assessee in buying and selling the books in question was to make a profit and that these profits were ultimately to be utilised in the furtherance of the aforesaid object of the assessee. The findings, therefore, indicate that the intention in carrying out the activity in question in that case was the making of the profits and the argument urged was that as these profits were intended to be utilised towards the ultimate charitable or religious object of the assessee-society, the assessee should not be considered to be a dealer. It must be noticed that, in that case, the books were purchased and sold by the assessee like any commercial book-seller and it was not the case of the assessee that these purchases and sales were made in the course of the direct implementation of the object of the assessee-society, as in the case before us. This case, therefore, is altogether different from the case before us.

9. In the result, the question referred to us for our consideration must be answered in the affirmative. The applicant must pay to the respondent the costs of this reference.

10. Reference answered, in the affirmative.