2023 (1) TMI 295 - HC - CST, VAT & Sales Tax
Doctrine of mutuality - club and association service - whether after the 46th Constitutional Amendment made in the Constitution which came into effect from 02.02.1983, the services in form of foods and drinks provided to the members of the club would be included under the term 'sale' and liable to be taxed? - HELD THAT:- Section 2(h) (v) of U.P. Trade Tax Act, 1948 provides that in case of supply of goods by any unincorporated association or body of persons to members shall be considered as 'sale'. Further Section 2(h)(vi) provides that any services in whatsoever manner such as foods and drinks provided for human consumption shall also be encompassed under the term 'sale'. The earlier Constitution Bench decision in THE JOINT COMMERCIAL TAX OFFICER, HARBOUR DIVISION II, MADRAS VERSUS YOUNG MEN´S INDIAN ASSOCIATION, MADRAS AND OTHERS [1970 (2) TMI 87 - SUPREME COURT] had held that where supply of various preparations by clubs to members is involved, it shall not be sale, as there is no transfer of property from one to another. If the club even though a distinct legal entity is only acting as agent for its members in the matter of supply of various pre- parations to them and no sale would be involved as the element of transfer would be completely absent.
The Apex Court further, while answering the question posed by the Division Bench, in STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT] has held that the judgment rendered by the earlier Constitution Bench in the matter of Young Men's Indian Association continues to hold the field even after 46th amendment. According to Apex Court Sub-clause (f) of Article 366 (29-A) has no application in member's club.
As the matter is no more res integra and the Apex Court has clarified that Sub-clause (f) of Article 366 (29-A) does not apply to the member's club and it is not disputed that the revisionist is a club incorporated and is serving foods and drinks to its members, it is not covered under the definition of Section 2 (h) of the Act of 1948, as held by the Tribunal - Revision allowed.