CST v. Sai Publication Fund 2002 (4) SCC 57

CST V. SAI PUBLICATION FUND

Whether the respondent is a dealer in accordance with Section 2(11) of The Bombay Sales Tax Act, 1959?
Whether the trust, by publishing and selling booklets and other literature bearing Saibaba’s words, can be said to be engaged in a “business” as contained under Section 2(5A) of the Act?

A trust or religious organization that sells books and other literature at a nominal price to cover costs are not engaged in a business and is therefore not liable to pay sales tax.

The respondent, Sai Publication Fund, was a trust created by four devotees of Saibaba of Shirdi with the object of spreading his message.
In furtherance of its object, the trust published books, pamphlets, and other literature containing the message of Saibaba under the aegis of “Sai Publications”.
The trust sold these publications to devotees at a nominal price to cover costs.
The sale proceeds of the publications went to the trust and form part of the trust property, which could be utilized only for the advancement of the objects of the trust.
There was a specific provision in the trust deed that in the event of the failure of the trust to carry on its aims and objects, the remaining fund in its hands would be handed over to Sansthanam of Shirdi.

The Hon’ble Supreme Court of India in this case held that the trust / organization was not a “dealer” within the meaning of Section 2(11) of the Bombay Sales Tax Act, 1959.
The Court held that the trust’s activities were not commercial in nature and that the sale of literature was incidental to its main purpose of spreading the message of Saibaba.
The Court also noted that the trust was not generating a profit from the sale of literature.
The Court further held that the trust’s activities were not covered by the definition of “business” under Section 2(5A) of the Act.
The Court held that the trust was not engaged in any trade, commerce, or manufacture, and that its activities were not in the nature of trade, commerce, or manufacture.
The Court’s judgment in this case has important implications for trusts and religious organizations that sell literature and other goods at a nominal price to cover costs.
The judgment clarifies that these organizations are generally not liable to pay sales tax.