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Young Men's Indian Association (Regd.) Vs. Jt. Commercial Tax Officer, Harbour Dn. Ii (23.11.1962 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectSales Tax;Constitution
CourtChennai High Court
Decided On
Case NumberWrit Petn. Nos. 129, 130 and 181 of 1960
Judge
Reported inAIR1964Mad63; [1963]14STC1030(Mad)
ActsConstitution of India - Articles 14, 226 and 246; Madras General Sales Tax Act, 1939 - Sections 2; Madras General Sales Tax (Amendment) Act 1959; Companies Act - Sections 26
AppellantYoung Men's Indian Association (Regd.)
RespondentJt. Commercial Tax Officer, Harbour Dn. Ii
Appellant AdvocateN. Venkatarama Iyer and ;V. Thyagarajan, Advs. for ;V.C. Gopalaratnam and ;A.K. Sriraman, Advs.
Respondent AdvocateAdv.-General and ;R.G. Rajan, Adv. for ;Addl. Govt. Pleader
Cases ReferredMadras v. Deputy Commercial Tax Officer
Excerpt:
sales tax - levy of tax - articles 14, 226 and 246 of constitution of india and madras general sales tax act, 1939 - propriety of levy of sales tax on sales by cosmopolitan club of tiffins to its members - supply of refreshment by club to its members against payment - cannot be said that there has been transfer of property by club as absolute owner to its members as purchasers - club cannot regarded as dealer nor can supply of refreshment to its members be regarded as sale within meaning of act. - .....of members' subscription is not a transfer of property from the club as such to a member.'this point, as i said, was not specifically decided but left open by the division bench in the earlier case just referred to. but the learned judges at the same time made certain observations which appear to support the view mack j. took. the point is one of great importance and on first impressions, i must say, i find myself unable to agree with that view of mack j. it is desirable, therefore, that the point is decided by a division bench. the papers in the three writ petitions will be placed before my lord, the chief justice, far the purpose.
Judgment:
ORDER

Veeraswami, J.

1. In the first of the petitions the propriety of levy of sales-tax on the sales by the Cosmopolitan Club of tiffins to its members arises. In Dy. Commercial Tax Officer, Triplicane v. Cosmopolitan Club : AIR1954Mad1144 , a Division Bench of this Court expressed the view that inasmuch as such sales were not in the course of business they were not taxable. The other aspect as to whether the Club being an incorporated body, the transactions could not be regarded as sales by the incorporated body to its members as contrasted with similar transactions between a non-incorporated proprietary or other types of clubs to their members was not specifically decided but left open. In view of this decision an Explanation to the definition of Dealer and another explanation to the definition of sale have since been incorporated. Under the Explanation the sales tailing with in its purview need not be in the course of business. The Explanation to the definition of dealer deems certain persons who sell not in the course of business to be dealers for purposes of the Act. In the course of arguments, in these petitions reliance is placed upon a decision of Mack J. in Cosmopolitan Club, Madras v. Deputy Commercial Tax Officer, Triplicane, : AIR1952Mad814 , where the learned Judge held:

'A sale therefore must in the first place be a transfer of property in goods, I hold that the supply of refreshments in a members' club such as this registered Under Section 25 of the Companies Act, purchased out of club funds, composed of members' subscription is not a transfer of property from the club as such to a member.'

This point, as I said, was not specifically decided but left open by the Division Bench in the earlier case just referred to. But the learned Judges at the same time made certain observations which appear to support the view Mack J. took. The point is one of great importance and on first impressions, I must say, I find myself unable to agree with that view of Mack J. It is desirable, therefore, that the point is decided by a Division Bench. The papers in the three writ petitions will be placed before my Lord, the Chief Justice, far the purpose.


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