Statutory canteen service to workers is not a taxable sale where the dominant object is welfare, not commerce.

A mill canteen maintained to satisfy a statutory welfare obligation under the Factories Act was treated as rendering of service to workers, not a sale of food liable to sales tax or entry tax. The decisive factor was the dominant character of the activity: it functioned as an integral incident of the industrial establishment and a welfare measure, regardless of whether it was operated by the mill, an association, or a contractor. On that basis, the assessment orders lacked jurisdictional support, and the impugned assessment, appellate, revisional, and revisional-confirming orders were quashed.

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Issues: Whether the operation of the mill canteen constituted a sale of food articles liable to sales tax and entry tax, or merely rendering of service to the workers so as to fall outside the charging provisions.

Analysis: The canteen was maintained pursuant to the statutory obligation under the Factories Act, and the activity was incidental and integral to the industrial establishment. The decisive factor was the nature of the activity, not whether the canteen was run directly by the mill, by an association, or through an individual under contract. The substance of the transaction was service rendered as a welfare measure for workers, and not a commercial sale of food for consumption elsewhere. On that footing, the assessment orders treating the canteen transactions as sales lacked jurisdictional basis.

Conclusion: The canteen activity was not liable to sales tax or entry tax as a sale; it was service to the workers, and the levy was unsustainable.

Final Conclusion: The impugned assessment, appellate, revisional, and revisional-confirming orders were quashed, and the petitioner was held not liable to tax on the canteen transactions.

Ratio Decidendi: Where a canteen is maintained to discharge a statutory welfare obligation and the dominant object of the activity is rendering service to workers, the transaction is to be treated as service and not as sale for tax purposes.

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