Members' club supplies to members are not sales where no transfer of property occurs, and deeming tax provisions cannot enlarge the taxing entry.

A purely members' club supplying refreshments to its members from a common mess or canteen, without profit and as part of mutual arrangement, was treated as acting for the members rather than making a sale. Because no transfer of property from an owner to a buyer occurred, the transaction fell outside the constitutional concept of sale and could not be taxed as sales turnover. The amended deeming provisions in the Madras General Sales Tax Act were upheld as valid, as clubs and similar mutual organisations formed a distinct class and the provisions targeted organised supply of goods to members. The commentary concludes that such member-only supply is not a sale and is not liable to sales tax.

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Issues: Whether the supply of refreshments by a purely members' club to its members constitutes a sale attracting sales tax under the amended Madras General Sales Tax Act, and whether the deeming explanations to the definitions of dealer and sale are constitutionally valid.

Analysis: The Club existed only for the benefit of its members and maintained a common mess and canteen as an incident of its objects. The articles purchased for preparation of refreshments were acquired from club funds for the members' use, the expenses were shared by the members, and the Club derived no profit. In such a setting, the transaction was held to be no more than the club acting as an agent or mandatory for the members in procuring and supplying refreshments, so that no transfer of property from an absolute owner to a purchaser took place. Since a sale within the constitutional entry requires a real transfer of property in goods, the State Legislature could not, by deeming provisions, enlarge the taxing entry so as to tax what was not in law a sale. The amended definitions were also upheld as not offending equality, because clubs and similar mutual organisations formed a distinct class and the impugned provisions were aimed at organised supply of goods to members.

Conclusion: The supply of refreshments by the Club to its members was not a sale, the Club was not liable to sales tax on that turnover, and the writ petition was entitled to succeed.

Ratio Decidendi: A purely members' club that supplies goods to its members only as part of a mutual arrangement, without any transfer of property from an owner to a buyer, does not effect a sale; a deeming provision cannot constitutionally convert such a non-sale transaction into a taxable sale.

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