Employee food supply under wage arrangement is not a sale when provided as part of service conditions.

Supply of food to employees by a hotel proprietor under a statutory wage arrangement, with monthly wage deductions, was treated as part of the contract of service rather than an independent sale. The analysis applied the essential elements of sale under the Andhra Pradesh General Sales Tax Act, requiring transfer of property in goods, buyer and seller, mutual assent, and price or other monetary consideration. Because the food was provided as an employment amenity and part payment of wages in kind, the deduction was not regarded as real sale price. The supply was therefore not exigible to sales tax.

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Issues: Whether the supply of food by a hotel proprietor to its employees, with a monthly deduction from wages under the applicable government order, constitutes a sale within the meaning of section 2(n) of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The expression "sale" under the Act was treated as requiring the essential elements of a transfer of property in goods, a seller and buyer, mutual consent or bargain, and a price or other monetary consideration. A mere transfer of property without volition or mutual assent was held not to amount to sale. The transaction was examined in substance and was found to arise from the contract of service, with food supplied as part payment of wages in kind under a statutory wage arrangement made under section 11(2) of the Minimum Wages Act, 1948. The deduction from wages was not treated as a real price for a separate sale. The Court also distinguished cases where canteen supplies or supplies to members involved independent taxable entities and actual sale for price. Applying the principle governing service transactions, the supply of food to employees was held to be an amenity incidental to employment rather than an independent contract of sale.

Conclusion: The supply of food to the employees did not amount to a sale under section 2(n) of the Andhra Pradesh General Sales Tax Act, 1957, and the tax demand could not be sustained.

Ratio Decidendi: A supply made to employees as part of a contract of service and in discharge of a statutory wage arrangement, without real mutual assent to a sale for price or other monetary consideration, is not a sale exigible to sales tax.

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