Taxability of incorporated club supplies to members under sales tax law referred to a larger Bench for clarification.

The Court found that the taxability of supplies by an incorporated club to its permanent members under the sales tax regime raised unresolved questions after the Forty-sixth Amendment. It noted that earlier authorities on members' clubs, mutuality and agency did not conclusively determine whether those doctrines still apply in the presence of the constitutional deeming fiction in Article 366(29A). Because the interaction between the club's corporate character, the club-member relationship and the deeming provision required authoritative clarification, the Court referred the controversy to a larger Bench.

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Issues: Whether the controversy regarding taxability of supplies made by an incorporated club to its permanent members under the sales tax regime warranted consideration by a larger Bench in view of the effect of the Forty-sixth Amendment and the earlier decisions on mutuality and agency.

Analysis: The Court noted that the earlier authorities concerning members' clubs, mutuality, and agency did not conclusively settle whether those principles continue to apply after the introduction of clause (29A) in Article 366 of the Constitution. It observed that the interaction between the deeming fiction of sale, the character of an incorporated club, and the relationship between the club and its permanent members required authoritative clarification. In view of the importance of the legal questions and the existing uncertainty, the Court held that the matter should be placed before a larger Bench.

Conclusion: The controversy was referred for decision by a larger Bench.

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