TMI Blog2012 (6) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... clubs to which category the clubs in the present case belong cannot be made subject to the provisions of the Licensing Acts concerning sale because the members are joint owners of all the club property including the excisable liquor. The supply of liquor to a member at a fixed price by the club cannot be regarded to be a sale - Where such a club has all the characteristics of a members' club consistent with its incorporation, where every member is a shareholder and every shareholder is a member, no licence need to be taken out if liquor is supplied only to the members. sale and service are different but the basic feature common in both transaction requires existence of the two parties - in view of the mutuality and in view of the activities of the club, if club provides any service to its members may be in any form including as mandap keeper, then it is not a service by one to another as foundational facts of existence of two legal entities in such transaction is missing - in favour of assessee. - W.P. (T) NO. 2388 OF 2007 - - - Dated:- 15-3-2012 - PRakash tatia, APARESH KUMAR SINGH, JJ. ORDER By Court This writ petition has been preferred by Ranchi Club Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n are not on the principle of mutuality and, therefore, may be liable to any tax as a transaction between two parties. However, when the club is dealing with its members, it is not a separate and distinct individual. It is submitted that in identical facts and circumstances, however, in the matter of imposition of sales tax, when the club was expressly included in the statutory definition of 'dealer' under Madras General Sales Tax Act, 1959, so as to bring the club within the purview of taxing statute of the Madras Sales Tax, the Hon'ble Supreme Court, in the case of the Joint Commercial Tax Officer v. The Young Mens' Indian Association , considered the definition of the 'dealer' by which the club was declared "dealer" and after considering the definition of "sale" as given in the Act of 1959 and explanation-I appended to Section 2( n ), specifically declaring the "sale" or "supply or distribution of goods by a club" to its members whether or not in the course of business was declared deemed to be a "sale" for the purpose of the said Act. In that situation, Hon'ble Supreme Court considered the issue that the club is rendering service or selling any commodity to its members for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the taxing statute may have its own definition and meaning and they are required to be given effect to irrespective of the fact that meaning of the same word in different statute has been given differently. It is submitted that the Hon'ble Supreme Court in that fact situation of imposition of Sales Tax may have held that there cannot be sale by oneself to oneself and himself to himself but the club can certainly render the service to its members and tax is on service and the members are paying for the service to the club and, therefore, it is a service for consideration rendered by the club and is liable for the tax. 6. We have considered the submission of the learned counsel for both the parties and perused the facts of the case and the relevant provisions of law and the judgements which have been relied upon by the learned counsels for the parties. 7. Section 65 gives the definition for the purpose of the Chapter under the Finance Act, 1994 and for our purpose, relevant is Section 65(25a) which is as under :- Section 65(25a). "club or association" means any person or body of persons providing services, facilities or advantages, for a subscription or any other amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried on the business of buying, selling, supplying or distributes goods from or to its members for cash or for deferred payment or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purpose of this Act; 14. The definition of sale as given in Section 2( n ) of the Madras General Sales Tax Act, 1959 is as under :- Section 2( n ). " 'sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of business for cash or for deferred payment or other valuable consideration ............ " 15. The question which was considered by the Hon'ble Supreme Court in the case of Joint Commercial Tax Officer, Harbour Division, II-Madras v. The Young Men's Indian Association reported in 1970(1) SCC 462 was that whether the supply of various preparations by each club to its members involve a transaction of sale within the meaning of Sales of Goods Act, 1930. Hon'ble Supreme Court held that - "Thus in spite of the definition contained in Section 2(n) read with Explanation I of the Act if there is no transfer of property from one to another there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court categorically held that in absence of two, there cannot be transaction of transfer of property. 17. The Full Bench of Patna High Court in the case of writ petitioner itself i.e., in the case of CIT v. Ranchi Club Limited ( Supra ), after finding that Ranchi Club is a limited company incorporated under the Indian Companies Act, considered the various clauses of the main objects of the club and relying upon various judgements, in paragraph 12 observed as under :- 12. Therefore, by applying the principle of mutuality Members" Clubs always claim exemption in respect of surplus accruing to them out of the contributions received by the clubs from their members. But this principle cannot have any application in respect of the surplus received from non-members. It is not difficult to conceive of cased where one and the same concern may indulge in activities which are partly mutual and partly non-mutual. True, keeping in view the principle of mutuality, the surplus accruing to a Members' Club from the subscription charges received from its members cannot be said to be income within the meaning of the Act. But, if such receipts are from sources other than the members, then st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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