Members' club supplies to its own members lack the commercial sale element needed for sales tax liability.

Supplies of refreshments, drinks and similar articles by a non-profit members' club to its own members were not sales within the Hyderabad General Sales Tax Act because the statutory concept of dealer and sale required a transfer in the course of trade or business for valuable consideration. The club's constitution and by-laws showed a social and recreational association, not a profit-making concern, and the pricing at cost plus a margin to cover overheads did not create commerciality. The absence of profit motive and taint of trade was decisive, so sales tax could not be levied on those supplies.

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Issues: Whether supplies of refreshments, drinks and similar articles by a members' club to its own members constitute a sale by a dealer liable to sales tax under the Hyderabad General Sales Tax Act.

Analysis: The statutory definitions required a transfer of property in goods in the course of trade or business for valuable consideration, and the concept of dealer contemplated a commercial activity. The club's constitution and by-laws showed that it was a social and recreational members' association, not a profit-making concern. Supplies were made to members at cost plus a margin intended to meet overheads and possible losses, and any profit was merely incidental. The absence of taint of commerciality and the absence of a profit motive were decisive. The reasoning adopted the principle that a members' club supplying goods to its own members, without commercial motive, does not engage in sales in the statutory sense.

Conclusion: The supplies were not sales within the meaning of the Act, and the levy of sales tax was not sustainable. The petitioner's challenge succeeded and writs were granted.

Ratio Decidendi: Supplies by a non-profit members' club to its own members, lacking commerciality and profit motive, do not amount to sales in the statutory sense for sales tax purposes.

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