Real nature of sale determines trade tax liability where cooked food is supplied in club premises.

For trade tax on cooked food sold in club premises, liability depended on the real nature of the transaction and the person who actually conducted the sales and earned the profit. The assessee prepared and supplied the food using the club premises and brand name, while the club merely provided facilities and reflected receipt entries and bills in its name. Those accounting entries did not change the underlying commercial substance. On the evidence, the assessee was the real dealer for the relevant period, so tax liability attached to the assessee and not to the club; the revisions failed and the assessment was sustained.

---

---

Issues: Whether, on the facts relating to supply of cooked food in the club premises, the assessee or the club was liable to pay trade tax on the turnover from such sales.

Analysis: The assessee carried on the business of preparing and supplying cooked food in the club premises, using the club's infrastructure and brand name, while the sale proceeds were received and then adjusted after deduction of 12% towards facilities and allied expenses. The club's mere reflection of receipt entries and issuance of bills in its name did not alter the real nature of the transaction. On the evidence, the assessee purchased raw material, prepared the food, supplied it to the consumers, and earned the profit from the sales, whereas the club only provided the premises and facilities. The transaction therefore showed that the assessee was the real dealer for the disputed period.

Conclusion: The liability to pay tax was held to be on the assessee and not on the club.

Final Conclusion: The revisions failed, the substantial questions of law were answered against the assessee, and the assessment of the assessee was sustained.

Ratio Decidendi: In determining liability to trade tax, the real nature of the transaction and the person who actually conducts the sale and earns the profit are decisive, and not merely the name in which bills or account entries are maintained.

---