V. Sethuraman, J.
1. These revisions have been filed by the State of Tamil Nadu to revise the order of the Sales Tax Appellate Tribunal, Madras made in T.A.Nos. 380 and 381 of 1974, dated 3rd September, 1974.
2. The assessee is an association of the officers of the State and Central Government and also quasi-Government employees. It came into existence in 1907 and was registered under the Societies Registration Act of 1860 in 1909. The objects of the Association are to promote sympathy and friendly intercourse amongst its members; to grant allowance to the widows or children of members who might have been left destitute and who, in the opinion of the Committee, are deserving help; to grant scholarship to deserving Indians for competing for any of the Government Services or for acquiring proficiency in any Science, Art or Industry; and to grant advances of money to members visiting foreign countries for professional studies. The Association is running a hostel in the name of 'Indian Officers' Association Hostel' at Mohana Vilas, Royapettah, Madras. The hostel has its separate rules and has separate accounts. In the years 1966-67 and 1971-72 the Sales Tax Authorities took action in levying sales-tax on the turnover of the mess in the hostel. The assessee-claimed that it was not a dealer under the Sales Tax Act, and also claimed exemption on the basis of the Supreme Court's decision in the case of Joint Commercial Tax Officer v. Young Men's Indian Association, Madras Cosmopolitan Club, Madras and Lawely Institute, Ootacamund : 3SCR680 . The assessing authorities rejected this claim for exemption on the ground that the inmates of the hostel were not members of the Association.
3. With effect from 1st January, 1973, new class of membership known as the 'Associate Members' was introduced and the inmates would be Associate Members. In spite of these amendments, the Sales-tax Authorities held that these amendments taking effect only from 1st January, 1973 would not affect the years with which we are now concerned. The assessments so made was confirmed by the Appellate Assistant Commissioner, in appeal. When the matter came before the Sales Tax Appellate Tribunal, the Tribunal after elaborately considering the facts as well as the other decisions cited before it, came to the conclusion that the inmates of the hostel were following a dividing system that they had formed themselves to be a separate group which did not have a separate existence from its members and that there was no sale within the meaning of the Tamil Nadu General Sales Tax Act It is this order which is now questioned in this revision.
4. As considered by the Appellate Tribunal itself, the matter will have to be approached from two standpoints. One is to see, what would be the legal position, if the Association itself was running the hostel. The second is to examine the matter in the light of the students themselves running the hostel for themselves by adopting the dividing system.
5. Even assuming that the Association itself was running the hostel, the point to be considered is whether there was any sale by the Association as a dealer at the time when the food items were taken by the students. The objects of the Association have been set out earlier. From the objects themselves it is clear that the idea is to promote a kind of camaraderie among the families of the members who were Government servants of the State or of the Centre. There is also a provision for the grant of allowances to the widows or children of members who might have been left destitute. This object also shows that the idea was to take the family as a unit and the aim of the'association was to be of Assistance to the families.
6. The hostel has been running for a long time in order to accommodate the children of the Government servants, who are working elsewhere and whose children are educated in Madras. The qualification for joining the hostel is that the child or the student must belong to the family of the officer who is a member. If such an institution was not in existence, then there would have been great difficulties in finding wholesome food and proper accommodation for the children or the students drawn from the families of the Government servants. The charges would not be as moderate as here. Thus it serves the purpose of a home away from their homes. In such a case the point to be considered is whether the provision of amenity in the shape of providing food for the children or the students drawn from the family of the members can be treated as sale by a dealer. There is no element of sale as such in providing this kind of amenity. It is a case of mutual help.
7. The case would fall within the principles of the decision of this Court in State of Tamil Nadu v. Madras Advocates' Co-operative Society Ltd. (1976) 38 S.T.C. 297 : 1977 T.L.R. 1854 In that case, the advocates of this Court were running a Co-operative Society, which was registered for the purpose of running a restaurant for the benefit of its members on a non-profit basis to the members, being the advocates practising in this Court. The cooperative society was assessed to sales tax on the ground that it was effecting sales of food and refreshments. The contention of the assessee was that it was not taxable, as it was neither a dealer nor doing any business and that its transactions did not amount to sales. This contention was negatived by the assessing authority and the Appellate Assistant Commissioner. The Tribunal found that the assessee was supplying tiffin and refreshments only to its bona fide members and that it was not effecting any sales and it was not a dealer under the Act. When the matter came before this Court it was held that there was no sale of any refreshments by the assessee and that therefore, the assessee was not liable to sales tax. It was further held that in the case of member's club even though it is a distinct legal entity, it is acting only as an agent for the members in the matter of the supply of various preparations and articles to them, that there was no element of transfer in such supplies, and that, therefore, it was held that there was no sale involved. It may also be mentioned here that this decision was sought to be challenged by filing an appeal to the Supreme Court and the Supreme Court did not grant special, leave for the purpose, the leave petition filed in this Court having failed earlier.
8. The only difference between that case and the present one is that in the quoted case the sale was only to the members. Here the service of food is to the children belonging to the family of the members. The family, as mentioned already, is being treated as a unit for the purpose of this Association. Therefore when the food articles were provided to the inmates of the hostel, drawn from the families, there was not any transfer or sale in favour of the inmates of the hostel.
9. If we examine the position on the basis that the inmates themselves were conducting the hostel by adopting the dividing system, the position will be a fortiori. Except the provision of the accommodation, the association did not do anything more. The students organised for themselves a mess and divided the expenditure among themselves. This is purely in the nature of mutual service and amenity provided by a group of persons for themselves. There is no element of sale in such a case also. Even if the accounts had been maintained by the association as a bookkeeper for the purpose of finding the total expenditure incurred and then dividing it, it will not make any difference as to the character of the amenity provided by the students for themselves on the application of the principle of mutuality.
10. The result is that the assessments for these two years were properly held to be wrong. The revision petitions fail and are dismissed with costs. Counsel's fee Rs. 250 one set.