VEERASWAMI, J.

The respondent, a limited liability company, is a spinning mill manufacturing cotton yarn. For the year 1960-61 the company was assessed on a turnover of Rs. 64, 89, 000 and odd of which the turnover now in dispute amounts to Rs. 1, 10, 025. That relates to what is called a fair price shop run by the assessee for the benefit of its employees. The assessees objection to bring to tax this part of the turnover was overruled by the revenue. But the Tribunal considered that the assessee is not a dealer in respect of the turnover and will not be liable to tax in respect of it.

Section 2 of the Madras General Sales Tax Act, 1959, contains definitions. There is an inclusive definition of "business". It says that the expression includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern. A dealer is defined in relation to the business he carries on by buying and selling among other things. "Turnover" for the purpose of the Act means the aggregate amount for which goods are bought or sold, or supplied or distributed by a dealer. The definition of "business" was amended by Madras Act 15, of 1964 with retrospective effect and, as amended, the definition is a follows :-

"Business includes -

(i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern; and(ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern." *

Prior to the Madras General Sales Tax Act, 1959, there are series of decisions of this Court that "business" for the purpose of the 1939 Act had to be understood in the context of the definition of "dealer" in that Act and meant a commercial activity, and that unless it was shown that the transaction was in the course of any trade or commerce with a motive to make profit it could not be said to be "business" within the definition. Sales effected as amenity to workers or by clubs to their members were excluded from the purview of tax. It was for this reason apparently the definition was amended. But "business" as defined in the 1959 Act, as it originally stood, paid attention only to the factual aspect of accrual of profit or not and not to the motive aspect. This defect appears to have been rectified by madras Act 15 of 1964. Under that Act for any activity to be "business" it is not necessary that it should be with a motive to make gain or profit and there should be any profit accrued form trade or commerce. It is this aspect of the matter that was under consideration in Southern Railway Employees Workshop Canteen v. Deputy Commercial Tax Officer, Tiruchirapalli It is there held that the definition as it occurs in Madras Act 15 of the 1964 is within the competence of the State Legislature, as the expression "sales of goods" in the relevant entry enabling the State to levy taxes on sales has been used in the sense defined in the Sale of Goods Act. But the question whether a transaction which is not inherently of commercial character is within the definition of "business" was not specifically considered.The primary requisite of "business" as defied even under Madras Act 15 of 1964 is that it should be a trade or commerce or adventure or concern in the nature of trade or commerce. Presence or absence of profit will not matter. But the activity must be of commercial character and in the course of trade or commerce. The second clause in the definition of "bussiness", as it appears to us, is still one invested with commercial character, for the reference is to any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern. Unless the transaction is connected with trade, that is to say, it has something to do with trade or has the incidence or elements of trade or commerce, it will not be within the definition. The words "in connection with or incidental or ancillary to" in the second part of the definition of "business", in our opinion, still preserve or retain the requisite that the transaction should be in the course of business understood in a commercial sense. The intention of Madras Act 15 of 1964 does not appear to be to bring into the tax net a transaction of sale or purchase which is not of a commercial character.

In this case it is difficult to say that the assessee has been carrying on business in fair price shop. We have looked into its articles of association and nowhere is there any reference to the carrying on of business in fair price shop. What appears to be probable is that the assessee in order to provide amenity to its workmen has opened the fair price shop so that commodities may be made available to them at fair price. It may be that in fact profit accrues. But that is not what is material. The question is whether the assessee meant to run the fair price shop as a trade or commerce or a commercial activity. We do not find it possible to say that the fair price shop is a commercial activity of the assessee. We hold that the assessee is not carrying on the business of selling commodities in the fair price shop in a trade or commercial sense, and that, therefore, it is not with reference to the fair price shop a dealer within the meaning of the Act.On that view the tax case is dismissed with costs. Counsels fee Rs. 100.