Collective hostel food supply without transfer of property is not a taxable sale under sales tax law

Where a students' hostel is managed collectively by the residents and monthly expenses are shared among them, the supply of food by the hostel does not involve any transfer of property and therefore is not a sale under the Mysore Sales Tax Act, 1957. On that basis, the assessment machinery could not be invoked against the hostels and the assessment orders were without jurisdiction. The constitutional challenge to the statutory explanation was unnecessary for disposal and was not decided.

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Issues: Whether the supply of food by a students' hostel to its residents, where the hostel is managed by the students themselves and the expenses are shared among them, constitutes a sale liable to sales tax under the Mysore Sales Tax Act, 1957.

Analysis: The undisputed facts showed that the hostels provided boarding and lodging, the students managed the hostels through their own secretaries, and the monthly expenses were divided among the students. On those facts, the furnishing of food by the hostel did not involve any transfer of property. A transaction lacking transfer of property cannot amount to a sale. Since no sale existed, the assessment machinery could not be invoked against the hostels. The constitutional challenge to the statutory explanation was unnecessary to decide for disposal of the petitions.

Conclusion: The supply of food by the hostels to the students was not a sale and the assessments were without jurisdiction; the challenge succeeded in favour of the petitioners.

Final Conclusion: The writ petitions were allowed and the assessment orders were quashed, with a direction restraining further assessment for the relevant year.

Ratio Decidendi: Where residents of a hostel collectively manage the hostel and share the expenses, the provision of food by the hostel does not involve transfer of property and therefore does not constitute a taxable sale.

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