Vimadalal, J.
1. This is a reference under section 61 of the Bombay Sales Tax Act, 1959, whereby two questions have been submitted to this Court for its decision.
2. The facts necessary for the purpose of this reference are that the applicant is a Society registered under the Bombay Co-operative Societies Act, 1925, and is a body corporate by virtue of the provisions of section 23 of that Act, and it is not disputed that the object of the Society is 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 belonging to the members of the applicant-Society, the Society has to maintain a fleet of transport vehicles and, for preserving the fish in the course of transport, it 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. It is common ground that for the year 1959-60, the purchase of ice by the Society was of the value of Rs. 20,534.11 nPs., while the Society received from its members a sum of Rs. 32,819.61 nPs. for the supply of the ice required for the transport of fish belonging to its members, with the result that there was a surplus of over Rs. 12,000 on the item of ice during the said year. It was the contention of the Society that it is not liable to pay sales tax on its turnover of ice because there was no 'sale' of the ice by the Society to its members and also because the Society did not fall within the definition of 'dealer' in section 2(11) of the Bombay Sales Tax Act, 1959. The Society, therefore, raised the question by means of an application under section 52 of the said Act, and the Deputy Commissioner of Sales Tax by his order dated 28th January, 1961, held that the Society is a 'dealer' in regard to the purchase and supply of ice to its members, that the Society's activity of supply of ice amounted to a sale, and that tax was payable by the Society in respect of the sale, subject to the deduction permissible under section 8(ii) of the said Act in respect of the purchases made from registered dealers. From that decision of the Deputy Commissioner of Sales Tax, the applicant-Society appealed to the Sales Tax Tribunal, which by its order dated 29th March, 1962, dismissed the appeal and confirmed the decision arrived at by the Deputy Commissioner of Sales Tax. The Society then applied to the Sales Tax Tribunal to refer 3 questions to this Court under section 61 of the Bombay Sales Tax Act, 1959, but in the course of the arguments on that application, it did not press the third question which, it was conceded, was merely consequential and dependent upon the answers to the first two questions which were sought to be referred to this Court. The Tribunal by its order dated 19th July, 1963, formulated and referred the following two questions to this Court :-
'(1) Whether the Society is a dealer in respect of the purchase and supply of ice to its members
(2) Whether the activities of supply of ice as aforesaid by the Society to its members amount to sales ?'
3. Before we proceed to deal with the arguments raised before us, it could be convenient to refer to the relevant statutory provisions under the Bombay Sales Tax Act, 1959. Section 2(11) of the said Act defines the term 'dealer' as follows : ''dealer' means any person who whether for commission, remuneration or otherwise carries on the business of buying or selling goods in the State, and includes a State Government which carries on such business, and also any society, club or other association of persons which buys goods from, or sells goods to, its members.'
4. Section 2(28) of the said Act defines the term 'sale' as follows :
''sale' means a sale of goods made within the State, for cash or deferred payment or other valuable consideration, and includes any supply by a society or club or an association to its members on payment of a price or of fees or subscription, but does not include a mortgage, hypothecation, charge or pledge and the words 'sell', 'buy' and 'purchase' with all their grammatical variations and cognate expressions, shall be construed accordingly.'
5. Section 3 of the said Act imposes a liability to pay sales tax on a 'dealer' whose sales exceed Rs. 30,000.
6. As far as the first question referred to us is concerned, as laid down by the Supreme Court in the case of The State of Gujarat v. Raipur . [1967] 19 S.T.C. 1, which was reiterated by the Supreme Court in the subsequent case of Deputy Commissioner of Agricultural Income-tax and Sales Tax, Quilon v. Travancore Rubber and Tea Co. [1967] 20 S.T.C. 520, the burden of proving that the assessee was carrying on the activity in question as a business is upon the taxing authorities. In order to make the applicant-Society liable for sales tax in respect of the supply of ice to its members, under section 3 of the Bombay Sales Tax Act, 1959, it is necessary to establish (1) that the applicant-Society is a 'dealer' within the terms of section 2(11) of the said Act; (2) that the said activity amounts to a 'sale' by the Society to its members; and (3) that the turnover in respect of the supply of ice during the year in question exceeded the taxable limit of Rs. 30,000. There is no dispute that the applicant-Society's taxable turnover in respect of the supply of ice for the year 1959-60 did exceed that figure. As far as the second ingredient mentioned above is concerned, viz., as to whether the supply of ice by the Society to its members amounted to a 'sale', in the view that we take in regard to the first ingredient, it is unnecessary to go into the same. We will, therefore, proceed to consider whether the taxing authorities on whom the burden lies have established that the applicant-Society is a 'dealer' in regard to the supply of ice to its members. The contention of Mr. B. C. Joshi on behalf of the Society is, firstly, that the supply of ice by the Society to its members does not amount to a sale, and secondly, that in any event, it has not been established that it is the business of the Society to supply ice to its members. As against that contention of Mr. B. C. Joshi for the Society, Mr. R. J. Joshi for the department has urged a two-pronged argument, viz., (1) on a construction of section 2(11), in order to constitute a society a 'dealer' it is not necessary that it should be the business of the society to buy or sell the goods in question; (2) in the alternative, that in the event of that construction of section 2(11) not being accepted by us, the applicant-Society must in the present case be held to have carried on the business of selling ice to its members. The first of these two arguments is really based on a construction of section 2(11) which enacts the definition of the term 'dealer' for the purpose of the Bombay Sales Tax Act, 1959. Mr. R. J. Joshi has contended that the applicant-Society falls within the very last part of the definition which reads 'and also any society, club or other association of persons which buys goods from, or sells goods to, its members', and he has submitted that that clause of the definition in section 2(11) is not governed by the word 'includes' but by the word 'means' in that definition. It is the contention of Mr. R. J. Joshi that, so read, the definition of a 'dealer' in section 2(11) would not require, in the case of a society, club or other association of persons that the buying or selling of goods should be carried on by such a society, club or association as a business. The alternative contention of Mr. R. J. Joshi is that, even if the last clause relating to societies, clubs and other associations is construed to be governed by the word 'includes', as a matter of plain language, the requirement of carrying on business cannot apply to it, because it is only in regard to the Central or State Governments that the inclusive portion of the definition provides that the activity in question should be in the nature of a business. In support of that construction of section 2(11), Mr. R. J. Joshi has relied upon the observations of Chagla, C.J., in the case of State of Bombay v. Ahmedabad Education Society [1956] 7 S.T.C. 497 which was a decision of a Division Bench. He has also sought to distinguish the decision of the Nagpur Bench, which took a contrary view in the case of Gondwana Club, Nagpur v. Sales Tax Officer [1958] 9 S.T.C. 450. It is, however, unnecessary for us to go into the observations or the decisions in the said two cases, because in our opinion this twofold argument urged by Mr. R. J. Joshi with regard to the construction of the definition of the term 'dealer' in section 2(11) of the Act overlooks the fact that these nice questions of construction do not really arise if, as we hold, the applicants' case falls within the substantive part with which section 2(11) opens the definition of the term 'dealer'. The opening part of that definition enacts that the term 'dealer' means any 'person' who carries on the business of buying or selling goods in the State. As a matter of plain language, the term 'person' would mean both a natural person as well as a juristic person like the applicant-Society which, being registered under the Bombay Co-operative Societies Act, 1925, is a body corporate. That a juristic person is included within the term 'person' is also made clear by the definition of that term in section 2(19) of the Act. The definition in section 2(19) includes unincorporated bodies within the term 'Person'. The last part of the definition of the term 'dealer' in section 2(11) relating to a society, club or other association of persons applies to unincorporated bodies, and the term 'persons' as used in that part can, therefore, only mean persons in the natural or physical sense of the term, and does not include unincorporated bodies. It must follow that the term 'persons' in the concluding portion of section 2(11) is not used in the sense in which it is defined in section 2(19). It must not be forgotten that section 2 itself starts with the words 'unless the context otherwise requires', and, in our opinion, the context in which the word 'persons' is used in the last part of the definition in section 2(11) requires 'otherwise', and it should, therefore, be construed in the manner stated by us above. We are also of opinion that the last clause of the definition in section 2(11), as well as the corresponding clause in section 2(28), were inserted ex majore cautela, because a transaction between an unincorporated body and one of its members being merely a distribution of joint property under which the remaining members release their rights in favour of one of them (vide Young Men's Indian Association (Regd.), Madras, and Another v. Joint Commercial Tax Officer, Harbour Division II, Madras, and Another [1963] 14 S.T.C. 1030 a question might otherwise arise as to whether it was a sale at all, and if so, who was the seller and who was the buyer, in such cases. On this construction of section 2(11), we must hold that a body corporate like the applicant-Society falls within the substantive opening portion of the definition of the term 'dealer' in section 2(11). We are fortified in this view by the recent unreported judgment of the Supreme Court of India in the case of The Deputy Commercial Tax Officer v. Enfield India Ltd. Co-operative Canteen Ltd. (Since reported at [1968] 21 S.T.C. 317 delivered on 23rd November, 1967, in which the question arose in regard to the liability of the Society which was the respondent in that appeal and which was a society registered under the Madras Co-operative Societies Act, 1932. It is not necessary for us to refer to the actual decision in the said case which was in regard to the provisions of the Madras General Sales Tax Act, 1959, but the Supreme Court has, in its judgment in the said case, taken the view that the respondent Society before it, which was a registered society, was a body corporate capable of holding property and was, therefore, a 'person'. The term 'person' which occurs in the substantive part of the definition of the term 'dealer' in section 2(11) of the Bombay Sales Tax Act, with which we are concerned in the present reference, must, therefore, be held to include the applicant-Society which is a juristic person or legal entity and, in that view of the matter, the requirement of carrying on of business which is clearly stated in that part of the definition, must apply in the case of the applicant-Society. That makes it unnecessary for us to consider the interesting question of construction which Mr. R. J. Joshi has raised in regard to the last part of the definition of the term 'dealer' in section 2(11) of the Bombay Sales Tax Act, 1959. We hold that, in the case of a society which is a body corporate, it is necessary that the activity in question should be carried on as a business in order to bring such a society within the definition of the term 'dealer' in section 2(11) of the Act.
7. We must now turn to the alternative argument of Mr. R. J. Joshi to the effect that on the facts found in the present case it must be held that the applicant-Society did sell ice to its members and carried on the 'business' of selling ice to its members. The question as to what is the test for determining whether a particular activity is carried on by way of a 'business' has fortunately been laid down in clear terms by the Supreme Court in two decisions to which we will presently refer. The first is the decision in the case of The State of Gujarat v. Raipur . ([1967] 19 S.T.C. 1), which has already been cited by us above on another point. The facts of that case were that the company which carried on business of manufacturing and selling cotton textiles sold miscellaneous old discarded items of stores, machinery and scraps and those sales were of a frequent occurrence and large in volume. In negativing the liability of the said company for sales tax in regard to the sale of stores, old machinery and sundry materials, the Supreme Court observed that from the mere fact that the sale of the said materials was frequent and the volume large, it could not be presumed that there was an intention to carry on business in these materials, nor would the fact that the price for which these materials were sold went into the profit and loss account of the said company, make it a part of the business of selling textiles. It was observed at page 9 :-
'In order that receipts from sale of a commodity may be included in the taxable turnover, it must be established that the assessee was carrying on business in that particular commodity.'
8. The test for the purposes of deciding whether a particular activity was carried on as a business as laid down in The State of Gujarat v. Raipur . [1967] 19 S.T.C. 1 was reiterated by the Supreme Court in the case of Director of Supplies and Disposals, Calcutta v. Member, Board of Revenue, West Bengal, Calcutta [1967] 20 S.T.C. 398. Holding that the Director of Supplies and Disposals, Calcutta, Government of India, was not carrying on the business of buying or selling goods within the meaning of section 2(c) of the Bengal Finance (Salts Tax) Act (6 of 1941), it was stated in the majority judgment delivered by Sikri and Ramaswami, JJ., as follows :
'To infer from a course of transactions that it is intended thereby to carry on business, ordinarily there must exist the characteristics of volume, frequency, continuity and system indicating an intention to continue the activity of carrying on the transactions for a profit. But no single test or group of tests is decisive of the intention to carry on a business.'
9. Ramaswami, J., then referred to the observations in the Raipur Manufacturing Co.'s case [1967] 19 S.T.C., already cited above, to the effect that the mere fact that the sales of the items were frequent and their volume was large did not lead to the presumption that when the goods were acquired there was an intention to carry on business, but the question in every case really was 'of intention to carry on business of selling' any particular class of goods. To the same effect are the observations of the Supreme Court in the case of Deputy Commissioner v. Travancore Rubber and Tea Co. [1967] 20 S.T.C. 520. For applying this test laid down by the highest Court, the question which must be posed is, was it the intention of the applicant-Society to carry on the business of selling ice to its members In our opinion, the answer to that question must necessarily be in the negative, as on the facts found in the present case, there can be no doubt that selling ice to its members was not the business of the applicant-Society. It is quite clear to us 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 cannot be said that it supplied ice to its members with the intention of carrying on business in ice. In that view of the matter, we hold that the applicant-Society was not a 'dealer' within the definition of that term in section 2(11) of the Bombay Sales Tax Act, 1959, in regard to the supply of ice by it to its members.
10. Since we have held that the applicant-Society was not a dealer within the definition of section 2(11) of the Bombay Sales Tax Act, 1959, it is not necessary for us to consider the further question as to whether the supply of ice by it to its members constituted 'sale' within the terms of section 2(28) of the said Act, or to answer question No. (2) referred to us, which embodies that point. We may also state that, in our opinion, the evidence on record is not sufficient to determine question No. (2). In the result, we answer the questions referred to us as follows :
Question No. (1) : In the negative.
Question No. (2) : Unnecessary.
11. We order that the respondents do pay the applicant's costs of this reference fixed at Rs. 250. Under section 61(5) of the Bombay Sales Tax Act, 1959, we order that the amount of Rs. 100 deposited by the applicant-Society along with their application for making this reference be refunded to it.
12. Reference answered accordingly.