Deemed sale of food by clubs to members brings them within sales tax net under amended law.

After the Forty-sixth Constitutional Amendment, supply of food and other consumables for consideration became a deemed sale under Article 366(29A)(f). The Andhra Pradesh General Sales Tax Act, as amended by Act 18 of 1985, widened the meanings of business, dealer, sale, tax and turnover and extended the charging provision to establishments supplying food or drink for consideration. A club's catering activity to its members fell within these deeming provisions; the omission of the word club from section 5-C did not exclude it, and absence of profit motive was irrelevant under the expanded definition of business. The clubs were therefore liable to sales tax as dealers.

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Issues: Whether the petitioner-clubs were "dealers" liable to pay sales tax under the Andhra Pradesh General Sales Tax Act, 1957, after the Constitution (Forty-sixth Amendment) Act, 1982 and the amendments made by Act 18 of 1985.

Analysis: Article 366(29A)(f) of the Constitution of India, inserted by section 4 of the Constitution (Forty-sixth Amendment) Act, 1982, deemed the supply of food and other consumables for consideration to be a sale. The amended Act also broadened the definitions of "business", "dealer", "sale", "tax", and "turnover" by sections 2(bbb), 2(e), 2(n), 2(q), and 2(s), and specifically brought within the charging provision section 5-C every dealer running a restaurant, eating house, hotel, or similar establishment supplying food or drink for consideration. The Court held that the petitioners' catering activity to members fell within these deeming provisions, that the absence of the word "club" in section 5-C did not exclude them, and that lack of profit motive or the no-profit-no-loss basis was irrelevant under the expanded statutory definition of business.

Conclusion: The petitioner-clubs were held to be dealers under the Act and liable to pay sales tax on the relevant turnover.

Final Conclusion: The writ petitions failed because the amended constitutional and statutory scheme brought club supplies of food and drink to members within the tax net.

Ratio Decidendi: After the Forty-sixth Constitutional Amendment and the corresponding State amendments, supply of food or drink by a club to its members for consideration is a deemed sale and renders the club a dealer liable to sales tax under the charging provisions of the Act.

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