The Telangana High Court ruled that the Hyderabad Race Club is not a “dealer” under the Andhra Pradesh General Sales Tax Act, 1957, as its activities lack a profit motive and are primarily charitable and incidental to promoting horse racing. The Court upheld the Sales Tax Appellate Tribunal’s decision, dismissing the State Government’s tax revision cases for six financial years. It held that oats sold by the club to horse trainers qualify as “cattle feed” under Entry 80 of the First Schedule, attracting concessional tax rates, since horses are legally considered cattle and oats are used solely as feed.

Rejecting the State’s argument that oats should be taxed as general goods at higher rates and on the purchase value, the Court clarified that tax liability arises only on the first sale value, which was the subsidized price charged by the club. Emphasizing a liberal interpretation of tax statutes, the Court noted that Entry 80 should be broadly construed to include all feed for livestock, including horses. Consequently, the club’s sales were incidental and non-profit, and no sales tax liability as a dealer arose, leading to the dismissal of the State’s appeals.