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SCA/8781/1997 17/ 17 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 8781 of 1997
For
Approval and Signature:
HONOURABLE
MR.JUSTICE JAYANT PATEL
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
JALARAM
VIRPUR SMRUTI TRUST - Petitioner(s)
Versus
JT.
CHARITY COMMISSIONER - Respondent(s)
=========================================================
Appearance
:
M/S
THAKKAR ASSOC. for
Petitioner(s) : 1,
MS TRUSHA PATEL, AGP for Respondent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 27/03/2008
ORAL
JUDGMENT
The
short facts of the case appear to be that the petitioner is
registered trust, which came to be formed on account of the trust
deed dated 17.3.1961, and it is registered vide registration No.
A/2132 at Rajkot. As per the petitioner, the purpose and the object
of the trust is to provide facility to the pilgrims, who visit
Virpur to offer their prayers to Shri Jalarambapa, while on the way
of Somnath, Drawka etc. As per the petitioner, the trust is running
guest house, and for maintenance of the guest house, it is incurring
expenses like electricity, bedding and other expenses, and the
amount/charge is being collected for maintenance of such expenses on
token basis from the visitors/pilgrims. As per the petitioner
running of guest house is a business activity, which would fall in
the category of Rule 32 (4) of the Bombay Public Trust (Gujarat)
Rules 1961 (hereinafter referred as to the ‘Rules’). It appears that
demand notice was issued for recovery of the contribution, by the
Asst. Charity Commissioner. The petitioner raised objection, and
contended that it has paid the amount of contribution, based on the
net income, after deduction of the expenses. The Asst. Charity
Commissioner, ultimately passed the order on 11.8.1995, whereby held
that the assessment be treated under Rule 32(4). It appears the the
Joint Charity Commissioner, in suo
motu exercise of the power under Rule 33(6), initiated the
proceedings against the order of the Asst. Charity Commissioner. The
petitioner submitted written reply, and contended that the order
passed by the Asst. Charity Commissioner is legal. The Joint Charity
Commissioner, ultimately found that running of guest house (Atithi
Gruh) cannot be said as trade/business and therefore, not falling
within the category of Rule 32(4) of the Rules and therefore, he
allowed the proceedings, and set aside the order passed by the Asst.
Charity Commissioner, and directed for the recovery of the remaining
amount. It is under these circumstances, the present petition before
this Court
Heard
Mrs. Sangeeta Pahwa learned Counsel for the petitioner, and Ms.
Trusha Patel learned AGP for the respondent.
The
principal aspect which may
deserves consideration in the present proceedings is the scope of
ambit of Rule 33(4), and as to whether the activity of the
petitioner for running guest house at Virpur can be said as falling
under Rule 33(4) of the Rules or not.
In
order to examine the above referred aspect, certain statutory
provisions, which may have the relevance, deserves to be considered.
Section
58 of the Bombay Public Trust Act (hereinafter referred as to the
‘Act) reads as under:
?S58.
Contributions by public trusts to Public Trusts Administration Fund.
[(1)]
Every public trust shall pay to the Public Trusts Administration
Fund annually such contribution on such date and in such manner as
may be prescribed:
[PROVIDED
that the contribution prescribed under this section shall-
(i)
In the case of a dharmada, be fixed at rates in proportion to the
gross annual collection or receipts of the dharmada;
(ii)
in the case of other public trust, be fixed at the rates in
proportion to the gross annual income of such public trust.]
[Explanation-
For the purposes of this section, the gross annual income shall
include gross income from all sources in a year excluding donations
given or offering made with a specific direction that they shall
form part of the corpus of the public trust;
PROVIDED
that the interest or income accruing from such donations or
offerings in the years following that in which they were given or
made shall be taken into account in calculating the gross annual
income.]
[(2)
Notwithstanding anything contained in sub-section (1), the State
Government may, by rules, provide for exemption of nay public trust
or class of public trusts from the whole or any part of the
contribution payable under that sub-section, subject to such
conditions, if any, as may be prescribed.]??
As
per Section 58(1) of the Act, and more particularly the proviso, two
categories are mentioned for the purpose of collection of
contribution. One being in case of Dharmada at the fixed proportion
to the gross collection or the receipts of Dharmada, and the another
being residuary, at the rate in proportion to gross annual income of
such public trust. Therefore, it appears that as per the scheme of
Section 58(1) of the Act, the contribution is payable in case of
Dharmada at the fixed rate in proportion to the gross annual
collection or the receipts of Dharmada. Whereas in case of other
public trust, such contribution is payable in proportion to the
gross annual income of such public trust. Section 58(2) of the Act,
provides that notwithstanding anything contained in sub-section (1),
the State Government may also provide by rules for exemption to any
public trust from payment of the whole, or part of contribution
payable.
At
this stage rule 32 may have the relevance. Rule 32(1) provides that
if the public trust other than exclusively for the purpose of
advancement and propagation of secular education or exclusively for
the purpose of medical relief or veterinary treatment of animals
shall pay annual the contribution in the Administration Fund at the
rate of 2 percent of its gross annual income, or, where public trust
is dharmada, its gross annual collection or the receipts, subject to
maximum limit of Rs. 50,000/- per year. Rule 32 (1A) provides that
notwithstanding anything contained in sub-rule (1), for the period
between 1st April, 1978 and 31st March, 1979
assessment shall be at the rate of 1 percent as against 2 percent as
provided by sub rule (1). Rule 32 (2) provides that the contribution
shall be assessed on the basis of the gross annual income or
collection or the receipts, as the case may be, based on the period
of previous 12 months from first day of March or any other day which
were fixed by the Charity Commissioner for the purpose of Section 33
(1) of the Act. Rule 32(3) provides for the mode of calculation of
gross annual income of a public trust or the gross
collection/receipts of a public trust in case of dharmada for the
purpose of assessment of the contribution and various heads are
provided for permissibility of the deductions. Rule 32(4) which
mainly arise for consideration in the present petition reads as
under:
32
(4) If a public trust conduct a business or trade, for the purpose
of assessing the contribution, the net annual profits of such
business or trade shall be treated as the gross annual income of the
business or trade.
The
aforesaid Rule 32(4) provides that if a public trust conduct a
business or trade, then for the purpose of assessing contribution,
the net annual profits of such business or trade shall be treated as
the gross annual income of the business or trade. Therefore, in case
of a public trust conducting the business or trade, such
contribution is payable on net annual profit of such business or
trade.
As
the impugned decision is based on aspect of activity, which cannot
be termed as business, as per the view taken by the Joint Charity
Commissioner in the impugned order, it may be required to examine
the meaning of word ?Sbusiness?? or word ?Strade??. In order to
understand the meaning ?Strade??, there is no much difficulty, and
it can be said understood to mean, if there is sale and purchase or
dealing of any product or items, such can be terms as ?Strade??.
It appears that learned Joint Charity Commissioner has misdirected
himself in the proceedings, on the basis that activity of trade and
of the business are the same. Whereas it was the contention of the
petitioner that it is conducting business. Since the legislature has
used word ?Sbusiness?? or ?Strade??, both the words ?Sbusiness??
and ?Strade?? would be required to be given proper meaning. Had
the legislature, intended to include only conducting of ?Strade??
under Rule 32(4), it might not have used the word ?Sbusiness??.
The fact that the word ?Sbusiness?? is also used, Rule 32 (4) can
be read to the effect that if a public trust conducts the ?Sbusiness??
or conducts a ?Strade?? for the purpose of assessment of the
contribution, the net annual profit shall be treated as the gross
annual income for the purpose of calculation of the contribution.
As
the activity of the petitioner trust of running guest house, is not
a trade, it is not required for this Court, to examine the matter in
detail for understanding the meaning of the word ?Strade??, but as
the contention of the petitioner is that running of guest house
would fall in the word ?Sbusiness??, it may have the relevance for
the purpose of deciding the present petition.
Learned
Counsel for the petitioner contended that in view of the
incorporation of the word
‘business’ in the present act, read with the rules, the meaning
deserves to be given. Whereas it is the contention of Ms. Trushal
Patel learned AGP that trust is not formed with the essential
purpose of conducing business, and if trust is not formed for
principal object of contending business, incidental object or the
incidental activity of running guest house, by the trust cannot be
permitted to travel beyond the main object of the trust and
therefore, would not fall within the definition of the word
?Sbusiness??, nor can be said that the petitioner trust conducts
the business while running guest house.
In
support of her contention learned AGP Ms. Trusha Patel relied upon
the decision of the Apex Court in case of Commissioner of
Sales Tax v. Sai Publication Fund reported at 2002(3) GLH 149.
If
the matter is examined, in light of the documents on record, the
trust deed shows that the same is formed for establishing the guest
house, and with the object to provide residential accommodation to
the pilgrims, who may stay at Virpur for offering prayers or while
visiting Girnar, Kund-Damodar, Jyotirling of Somnath, Dwarka, Temple
of Sudama etc. Therefore, the principal object is to provide
residential accommodation to the pilgrims. In view of the expressed
language of the trust deed, for providing residential
facility/accommodation to the pilgrims on the way to various places
of Saurashtra, by establishing Atithi Gruh (Guest House), I cannot
accept the contention of the learned AGP that the principal object
is different and its only by way of incidental object the trust is
running guest house. Therefore, the said decision is of no help to
the State Government.
It
deserves to be recorded that as such the meaning of the word under
any statute can be given in context on the principal statute and if
similar circumstances exists, the reference to the another statute
may assume importance. Merely because the particular word
under different statute which has different object altogether, is
interpreted, the same meaning, as such cannot be incorporated in
toto. The reference may be made to the decision of the Apex Court in
case of S. Mohan Lal, v. R. Kondiah reported at AIR 1979 SC
1132, more particularly the observations made at para 3
wherein the Apex Court inter alia observed as under:
?S3…
It is not a sound principle of construction to interpret expressions
used in one Act with reference to their use in another Act; more so
if the two Acts in which the same word is used are not cognate Acts,
Neither the meaning, nor the definition of the term in one statute
affords a guide to the construction of the same term in another
statute and the sense in which the term has been understood in the
several statutes does not necessarily throw any light on the manner
in which the term should be understood generally. On the other hand
it is a sound, and, indeed, a well known principle of construction
that meaning of words and expressions used in an Act must take their
colour from the context in which they appear…??
Therefore,
as such while giving correct meaning to the word ?Sbusiness??
under Rule 32(4), it has to be kept in mind that such rule as
referred to for the activity is of the public trust for the purpose
of calculation of the administration fund, and the word ?Sbusiness??
is not used in the language by legislature in taxing statute, or an
act governing or regulating only absolutely commercial activity. If
the plain and simple meaning of the word ?Sbusiness?? is to be
extracted, it would mean a regular activity in contradiction to
single action or single act. Therefore, if any particular singular
transaction or singular activity is undertaken, it may not fall in
the regular activity for example, a trust in building constructed,
permits accommodation of the pilgrims, once or twice, it cannot be
construed as the business of the trust, but if it is regular
activity run for providing of accommodation to the pilgrims in
guest house, it can be said that such activity would fall within the
meaning of the word ?Sbusiness??. At this stage reference may be
made to the decision of the Delhi High Court in case of M/s
Bakhtawar Singh Balkrishan, New Delhi v. Union of India and another
reported at AIR 1983 Delhi page 201, wherein question arose
for consideration before the High Court of Delhi for interpreting
the word ?Scarries on business?? or ?Sbusiness?? with reference
to Section 20 of CPC, which provides for the cause of action either
in whole or in part. In the said decision the meaning of the
expression ?Scarries on business?? from Halsbury’s Law of England
fourth edition volume 10 page 66-67 as considered by the English
Court in some cases was considered that ?Sthe person who merely
works for another for gain or was employee about the business of
another, could not be said to be ?Scarries on business?? within
the meaning of the expression ?Scarries on business?? because such
person was merely working for gain for another.
After
considering aforesaid, at para 7 it was observed as under:
7.??The
expression ?Sbusiness?? has a very wide import and is understood
in different sense in varying contexts. In its generic sense,
?Sbusiness?? is any purposeful activity, any activity, directed
towards some end, an activity engaged in as normal, logical or
inevitable and usually extending over a period of time. It has been
used in that sense as being synonymous with ?Srole?? or
?Sfunction??. While in its narrow sense, it is confined to
activity of a commercial nature with a profit motivation, in its
wide sense, it is used to denote conduct of his or its affairs by
any person, body or authority. There has been considerable
difficulty in defining the expression ?Sbusiness?? and while the
meaning to be attributed to the expression would depend largely on
the context, there is, by and large, unanimity that the expression
has a very wide import and would encompass in the word of Lindley,
L.J., (1884) 27 Ch D 71 ?Salmost anything which is an occupation,
as distinct from a pleasure-anything which is an occupation or duty
which requires attention is a business??. These words have since
found their echo in the subsequent decisions on the interpretation
of the expression ?Sbusiness?? and of analogous terms both in
England and in this country. The expression ?Scarries on business??
has the connotation of permanence and of regularity to distinguish
it from an isolated act or activity. The amplitude of the expression
?Scarries on business??, however, could not possibly be construed
as having been restricted merely because it is used in conjunction
with ?Spersonally works for gain?? nor it is possible to read into
the expression ?Scarries on business?? the element of gain or of
profit in the activity that is carried on. The expression ?Scarries
on business?? is much wider than what the expression in normal
parlance connotes because of the ambit of a civil action….??
I
am in agreement with the view taken by the High Court of Delhi. I
find that keeping in view the provisions of the present act, which
is essentially meant for
regulation of the activity of a public trust, there may not be
element of profit making, but may be element of rendering services
to the beneficiary, or to the public at large. Therefore, meaning of
the word ?Sbusiness?? must be read in wider sense instead of
restricting it only for such activity having element of profit or
commercialisation. However, such would apply to the trust, which is
exclusively running such activity on regular basis. Further if the
trust is a dharmada and also running regular activity for rendering
services to the society, then the dharmada would stand on separate
footing, and the regular activity of rendering service to the public
would stand on separate footing for the purpose of payment of
contribution, but subject to maximum limit prescribed.
If
the facts of the present case are examined in light of the aforesaid
observations, it can be said that the activity of the trust for
regularly maintaining the guest house for providing residential
accommodation to the pilgrims, can be said as conducting of
business, which would fall within the provisions of Rule 32(4) of
the rules. Therefore, the order passed by the Deputy Charity
Commissioner for insistence of the contribution based on the gross
receipts, and not based on the net actual profit/income cannot be
sustained in the eye of law. Hence, the same is quashed and set
aside.
The
petition is allowed. Rule made absolute accordingly. No order as to
costs.
(JAYANT
PATEL,J.)
Suresh*
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