P.K. Rama Krishna vs Special Additional Commercial Tax Officer (Evasions)

Kumarayya, J.—This is a petition for issuing a writ in the nature of mandamus directing the Special Additional Commercial Tax Officer (Invasions), Vijayawada, to abstain from collecting the tax of Rs. 1,547.80 P. as part of his assessment No. 4720 for the year 1962-63.

The petitioner is the sole proprietor of the General Hospital Canteen, Guntur. He started the canteen with the permission of the Superintendent of the hospital, in the compound of the General Hospital, which was leased to him on a monthly rent of Rs. 110 subject to various stipulations contained in the order dated 25th November, 1961. He had formally executed an agreement accepting all the conditions. His business consisted in the supply of articles of food and drink in the canteen to the staff and students of the General Hospital, Guntur. The Special Additional Commercial Tax Officer inspected the canteen, recovered some account books and slips showing credit sales from his possession, and after verification, came to the conclusion, that certain credit sales were not brought 1o account as bis regular sales. The return that the petitioner had filed contained the account of cash sales. As the accounts according to the officer were not correct and complete, he estimated the turnover on the basis of overhead charges incurred by the petitioner for the maintenance of the canteen and made assessment on a net turnover for the year 1961-62 and on a provisional turnover for the year 1962-63 and called upon the petitioner to pay the sales tax. The petitioner contended that he was not liable to pay sales tax as he does not come within the definition of a "dealer" nor do his transactions constitute sales within the meaning of that term as the canteen was started with the permission of the Superintendent for supply of refreshments exclusively to the members of the hospital staff and students within the premises at fixed rates much below the market rate and subject to various conditions with regard to tidiness or cleanliness of the premises. The Superintendent in fact is in control of preparations, cleanliness and supply of refreshments at fixed rates. There is no transfer of property by reason of supply of refreshments in the circumstances of the case, nor can the petitioner be called a "dealer". It may at the most be said to be works contract or the petitioner may be called an agent or a trustee. Hence, whatever be his turnover it is not assessable to sales tax. On this basis, the petitioner has challenged the assessment in question and filed this writ petition. The mode of assessment also has been called in question.

Mr. Seetharama Sastri, learned counsel for the petitioner, argues that the circumstances of this case do not attract the definition of a "dealer" as in Section 2(e) of the Andhra Pradesh General Sales Tax Act of 1957, in so far as the petitioner is concerned. It is not easy to appreciate how the petitioner in relation to his business in the canteen is out of the definition of a "dealer" in the Sales Tax Act. In order to come within the definition he must be a person carrying on the business of supplying goods directly or otherwise whether for cash, remuneration or other valuable consideration. The term "business" is of wide import. Anything which occupies time, attention and labour or the. purpose of profit must ordinarily be a business. Supply for price of the prepared articles to the entire staff of the hospital which occupies time, attention and labour cannot but partake of an activity in the nature of adventure or of concern in the nature of trade. It is a business. The petitioner being the proprietor of the canteen and its sole owner, entitled to profits of the business run by him, certainly falls within the definition of a "dealer". He can never possibly be an agent within the meaning of the term, as detailed in the Sales Tax'' Act. He is the proprietor himself. He is not a trustee either. Obviously enough he is running a business under an agreement in the compound which he has taken on lease. His transactions may be confined to the staff of the hospital and the students. They cannot on that account change the nature of his business or his status. He is a dealer. The law in this behalf is clear and well settled. It is sufficient if we refer to the latest decision of the Supreme Court in Deputy Commercial Tax Officer, Saidapet and Another Vs. Enfield India Ltd., Co-operative Canteen Ltd., We do not think it necessary to discuss that case elaborately here. In the light of the said ruling we should hold that the petitioner comes within the definition of a "dealer" and not an agent or trustee as he claims. The assessing officer, Special Additional Commercial Tax Officer (Evasions), Vijayawada, could, therefore, assess his transactions to sales tax. In the view we have taken that there was no want of jurisdiction, this petition must fail. It is, therefore, dismissed with costs. Advocate''s fee Rs. 100.