1. These six tax revision petitions arise out of the sales tax assessments for the assessment years 1963-64 to 1968-69 in respect of the transactions in the canteen run by the Madras Advocates' Co-operative Society. The society is registered under the Madras Co-operative Societies Act, 1932 (6 of 1932). One of the objects of the society is the running of a restaurant for the benefit of the members on a non-profit basis. On 22nd February, 1969, the Deputy Commercial Tax Officer, Esplanade I Division, inspected the canteen and found that it was not. assessed to sales tax and it had not been registered under the Act. He issued a notice to produce the accounts which was complied with by the society. The society later on furnished the turnover particulars for the several years for which the particulars were required from the society. From the accounts, it was found that the canteen had effected sales for the different years of particular amounts, the details of which need not be gone into. Pre-assessment notices were issued proposing to tax the turnover for the several years as gathered from the accounts. The assessee filed objections stating that the assessee was not taxable under the Tamil Nadu General Sales Tax Act, 1959, as it was neither a dealer nor doing any business and as its transactions did not amount to sales. It was further stated that if the turnover was found to be assessable, then the assessments could be compounded under Section 7. The objections were overruled and the transactions were held liable to tax. The respective amounts for several years as gathered from the accounts were therefore brought to tax. Appeals were filed before the Appellate Assistant Commissioner and they were unsuccessful.
2. In the further appeals before the Tribunal, the assessee contended that it was only distributing food to its members and that there was no transfer of property in goods or sale. It was also contended that the assessee was not doing any business so as to come within the purview of Sub-section (g) or (r) of Section 2. Various other contentions were also advanced.
3. The Tribunal considered three points as arising from the several contentions, viz., (1) Whether the society supplied tiffin and refreshments to non-members ; (2) Whether the supplies to members amounted to sales; and (3) Whether the society was a dealer within the meaning of Section 2(g) of the Act. There is a definite finding of the Tribunal that the society was supplying tiffin and refreshments only to its bonafide members. On the other two points also, the Tribunal accepted the assessee's submissions. The result was that the assessments were cancelled.
4. In the present appeals, the learned counsel for the revenue submitted that these are cases where the commercial tax authorities found that there were some sales of tiffin and refreshments to non-members also. On this point, there is a definite finding of the Tribunal that the society was supplying tiffin and refreshments only to its bona fide members. This being a finding of fact, it cannot merit interference at our hands. Further, the question as to whether there were sales to non-members was taken up only in the course of the proceedings after the assessment. In fact, in the previous assessment, it was not alleged that there was any sale to non-members. On the finding as it is, we have to proceed on the basis that there were no sales of refreshments to any non-member.
5. The next point for consideration is whether the assessee effected any sales within the meaning of the Tamil Nadu General Sales Tax Act, 1959. There are two decisions on this point and they are brought to our notice. The first decision is reported in Deputy Commercial Tax Officer v. E.I.L. Co-operative Canteen Limited : 2SCR421 This decision has been considered by a fuller Bench of the Supreme Court in a later decision reported in Joint Commercial Tax Officer, Harbour Division II, Madras v. Young Men's Indian Association, Madras : 3SCR680 . In the second decision, the assessees were three, namely, (1) Cosmopolitan Club registered under Section 26 of the Companies Act, 1913, as a non-profit earning institution, (2) the Young Men's Indian Association, a registered society providing a mess together with a canteen serving the needs of its members, and (3) the Lawley Institute managed by a Board of Trustees, the facilities in which were available only to members. In all the cases, the question that arose for consideration was whether there were sales to the members. The Supreme Court pointed out that in spite of the definition of 'sale' in Section 2(n) read with explanation I of the Tamil Nadu General Sa , if there was no transfer of property from one to another, there was no sale, which would be exigible to tax under the Act. In the case of a members' club even though it was a distinct legal entity, it was held that it was acting only as an agent for its members in the matter of the supply of various preparations and articles to them so that no sale would be involved. It was pointed out that there was no element of transfer.
6. Applying this decision of the Supreme Court, it has to be held that there is no sale of any refreshments by the society. The result would be that there is no liability to tax with reference to the transactions with which we are now concerned. It is not necessary to go into any other aspect. The tax revision petitions are, therefore, dismissed. There will be no order as to costs.