Club supply of liquor and soft drinks to members fell within the sales tax proviso, and the assessment was upheld.

An association that purchased liquor and aerated water on the strength of a valid registration certificate but supplied them to its members, rather than reselling them, was treated as falling within the second proviso to section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi. The assessing authority's estimation of purchases from the books and comparative club margins was accepted, and no illegality was found in the orders of the authorities below. The assessment was therefore upheld against the assessee.

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Issues: Whether the Association's supply of liquor and soft drinks to its members, after purchase on the strength of a registration certificate, attracted the second proviso to section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi.

Analysis: The Association held a valid registration certificate and purchased liquor and aerated water on that basis, but instead of effecting resale it supplied the goods to its members. The assessing authority estimated the purchases on the basis of the books and comparative club margins, and treated the transactions as falling within the second proviso to section 5(2)(a)(ii). No illegality was found in the orders of the authorities below.

Conclusion: The transactions were covered by the second proviso to section 5(2)(a)(ii) and the assessment was upheld, against the assessee.

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