Accommodation sales excluded from turnover where goods were sourced from sister concerns and sold without profit to customers.

Bread supplied to hospitals through stocks obtained from sister concerns was treated as accommodation sales excluded from turnover. The court applied section 2(r) and rule 6(c) of the Madras General Sales Tax Act on the basis that the assessees procured goods from another dealer to meet a particular customer's requirement, sold them immediately to that customer, recorded the transactions as accommodation sales with the supplying dealer's name, and made no profit. It rejected the argument that such sales must be casual or occasional, holding that no such limitation could be read into the rule. The transactions therefore fell within rule 6(c) and were rightly excluded from turnover.

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Issues: Whether the bread supplied to hospitals, other than Egmore Hospital, through stocks obtained from sister concerns constituted accommodation sales falling within rule 6(c) and therefore excluded from turnover.

Analysis: Section 2(r) of the Madras General Sales Tax Act excludes accommodation sales from turnover, and rule 6(c) treats as accommodation sales the amounts realised where a dealer obtains goods from another dealer specially to accommodate a particular customer, immediately sells them to that customer, records the transaction as an accommodation sale with the name of the supplying dealer, and makes no profit. The facts found showed that the assessees did not supply the bread from their own stock for the other hospitals, but arranged for supply from sister concerns, entered the transactions in their accounts as accommodation sales, and charged no profit. The rule was applied according to its language, and no additional requirement that the arrangement be casual or occasional could be imported into it.

Conclusion: The transactions squarely fell within rule 6(c) and were rightly treated as accommodation sales excluded from turnover.

Final Conclusion: The petition failed, and the assessment position accepted by the revenue was sustained.

Ratio Decidendi: Where a dealer obtains goods from another dealer specially to accommodate a customer, immediately sells them to that customer, records the transaction as an accommodation sale, and earns no profit, the sale is excluded from turnover under the governing sales tax provisions, irrespective of whether such dealings are regular or occasional.

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