Members' club catering lacks dealer status where activity remains incidental and non-commercial under sales tax law.

A non-profit members' club did not satisfy the definition of dealer under section 2(11) of the Bombay Sales Tax Act, 1959 in relation to its catering services for members, their families and restricted guests. The High Court applied the test of whether the activity had acquired an independent commercial or trading character, or whether the club merely acted as an instrument through which members enjoyed facilities inter se. Because the catering and special dinner parties remained confined to members and their invitees, and were incidental to the club's sporting object rather than business with outsiders, the club was not treated as carrying on dealer activity.

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Issues: Whether a sports club registered as a dealer under the Bombay Sales Tax Act, 1959, was a dealer within section 2(11) in respect of its catering activity for members, their families and restricted guests, including special dinner parties arranged at the instance of members.

Analysis: The club was a members' club formed to promote sports, and its catering facilities were confined to members and persons admitted only through members under the bye-laws. The statutory definition of dealer required not merely a supply of goods but the carrying on of business, and the extended definition of sale did not by itself convert every members' supply into commercial trading. The governing test was whether the club had acquired a commercial or business character, or whether it merely acted as a convenient instrument or agent through which members enjoyed facilities inter se. The catering to members, their families and limited guests was incidental to the club's main object and lacked any trading character. The same principle applied to special dinner parties booked by members, because those privileges remained confined to members and their invitees, were arranged through the club as a self-serving institution, and did not involve dealing with outsiders or a real transfer of property in the sense required to establish business.

Conclusion: The club was not a dealer under section 2(11) of the Bombay Sales Tax Act, 1959, in respect of its catering activity, including special dinner parties arranged by members.

Ratio Decidendi: A non-profit members' club does not become a dealer merely because it supplies catering facilities to members and their invited guests; it becomes a dealer only if the activity acquires an independent commercial character amounting to business or trading with outsiders.

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