Mutuality does not defeat trade tax on members' club supplies after the constitutional amendment and State taxing provisions.

After the Forty-sixth Constitutional Amendment and the corresponding U.P. Trade Tax Act provisions, food, refreshments and other goods supplied by an incorporated members' club to its members for consideration fall within the statutory concept of sale and are taxable. The doctrine of mutuality, though relevant in income-tax contexts where contributors and beneficiaries are identical, does not displace this post-amendment trade tax regime for a club having a separate legal identity from its members. On that basis, the refusal to produce books and the notices issued under the Act were not invalid.

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Issues: Whether the supply of food, refreshments and other articles by an incorporated members' club to its members was exempt from trade tax on the principle of mutuality; and whether, after the Forty-sixth Amendment to the Constitution and the corresponding State amendments, such supplies fell within the statutory definition of sale so as to justify the impugned notices.

Analysis: The club was a juristic person incorporated under the Companies Act and had a separate legal identity distinct from its members. The principle of mutuality, which may apply in income-tax matters where contributors and beneficiaries are identical and there is no real commercial dealing, was held not to control the levy of trade tax in the present context. The constitutional expansion of the concept of sale through Article 366(29A)(e) and Article 366(29A)(f) of the Constitution of India, together with the corresponding definitions in the U.P. Trade Tax Act, 1948, brought within tax net the supply of goods, including food and drink, by a club to its members for consideration. The earlier authorities dealing with mutuality could not override the post-amendment tax regime. The refusal to produce books and the issuance of notices under the Act were therefore not vitiated.

Conclusion: The club's supplies to members were liable to trade tax, and the impugned notices were valid.

Final Conclusion: The petitions failed on merits because the club could not resist trade tax on the footing of mutuality after the constitutional amendment and the State's corresponding taxing provisions.

Ratio Decidendi: After Article 366(29A) of the Constitution of India and corresponding State legislation, supplies of food and other goods by a members' club to its members for consideration are taxable sales and cannot be excluded by invoking the doctrine of mutuality.

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