Mutuality in members' clubs survives the 46th Amendment, barring tax on club-member transactions on that basis.

The doctrine of mutuality continues to apply to incorporated and unincorporated members' clubs even after the 46th Amendment to Article 366(29-A), so transactions between a club and its members are not taxable sales merely because of the constitutional deeming fiction. Applying the Supreme Court's ruling in Calcutta Club, the Madras HC held that show cause notices proposing tax on club-member dealings could not be sustained on that basis. Other factual or legal issues, if any, were left open for consideration by the assessing authority in accordance with law.

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Issues: Whether the doctrine of mutuality continues to apply to incorporated and unincorporated members' clubs after the 46th Amendment to Article 366(29-A) of the Constitution of India, and whether the impugned show cause notices proposing levy of tax could be sustained.

Analysis: The challenge to the impugned provisions was examined in the light of the larger bench ruling of the Supreme Court in Calcutta Club. That decision affirmed that the doctrine of mutuality survives the 46th Amendment and continues to govern incorporated and unincorporated members' clubs. On that basis, the levy proposed against the petitioners could not be sustained to the extent it proceeded on the premise that transactions between a club and its members constituted taxable sales. At the same time, the order noted that other issues, if any, could still be considered by the assessing authority in accordance with law.

Conclusion: The doctrine of mutuality applies to the petitioners' clubs and the writ petitions succeed to that extent; the impugned proceedings were interfered with and the matter was left open only for other factual or legal issues before the assessing authority.

Final Conclusion: The petitions were disposed of by applying the Supreme Court's ruling on mutuality, with the petitioners obtaining relief against tax recovery based on club-member transactions.

Ratio Decidendi: After the 46th Amendment, the doctrine of mutuality continues to apply to incorporated and unincorporated members' clubs, so club-member transactions are not treated as taxable sales merely by virtue of the deeming fiction in Article 366(29-A).

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