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TMI Blog1988 (8) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the dealer were exigible to tax under the provisions of the said Act, and that all the supplies of drinks, refreshment and other goods against price were also sales exigible to tax, subject to the restriction that if the dealer can prove that a part of such supply was made to club members (not stand members) but qua members then the part of the supply would not be deemed to be exigible to tax. By order dated September 21, 1981, the learned Assistant Commissioner, Commercial Taxes, Calcutta (South) Circle, on such "limited question", remanded the matter back to the Commercial Tax Officer, which finding has been affirmed by the Member of the said Tribunal in the penultimate paragraph of the judgment and which has been impugned in the present writ petition. In conclusion, the Member of the said Tribunal, by his order dated February 1, 1984 arrived at the conclusion that the learned appellate authority had correctly concluded that so far as the sales to the persons other than the club members are concerned, those should be charged to tax, after necessary enquiry into its extent. The facts of the case are as follows: The petitioners are all members and stewards of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he club also introduced various schemes through which horses sold at such auctions could be purchased by its members and other intending owners on fairly easy terms. During the year, which ended on March 31, 1974, the club had two such schemes, namely, a discount scheme known as "purchase scheme 1973-74" and a loan scheme known as "alternate purchase scheme 1973-74". In the subsequent year which ended on March, 1975, the club continued its said discount scheme but replaced the aforesaid loan scheme with a lease scheme known as -lease scheme 1974-75". Horses bought under any of the above schemes were required to race in Calcutta for at least three seasons. Participation in the aforementioned auction sales and the bidding of tenders for the lease of horses under the club's said lease scheme for 1974-75 were restricted to its club members, stand members and bidders, who after having applied were registered as approved bidders by the stewards of the club. The sale of horses by way of such auction constituted only a part of the club's effort to stimulate racing in Calcutta, in furtherance of and ancillary to its main activity, namely, racing. Receipts from such auction sales are insigni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to tax, and that in any event, the supply of refreshments to its members by the club could not amount to a sale, but was merely a release to the consuming member of their rights in the thing consumed by the other members. It appears from the order of the Assistant Commissioner of Commercial Taxes, however, that the said authority after referring to the several decisions of the Supreme Court as well as our High Court held that the appellant-club supplied refreshments, etc., to its members only as a matter of course. But the crucial test was mainly relevant to the point whether the appellant was a "dealer" or not. The appellate authority has observed that the club was engaged in the sale of goods as a regular business and, therefore, there was no reason why it should not be a "dealer". In revision, the Member, West Bengal Commercial Taxes Tribunal, had merely endorsed the view of the appellate authority whereby the appellate authority held, as far as the sales to persons other than the club members were concerned, that those should be charged to tax after necessary enquiry into its extent. The order of the Member, West Bengal Commercial Taxes Tribunal, has been imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods or animals and hand over the surplus, if any, of the sale proceeds to the person entitled to the same. Therefore, the question was whether the petitioner, the South Eastern Railway, could be considered as "a dealer", within the meaning of section 2(c) of the Act, for the purpose of its liability to sales tax in respect of the sales conducted by it under the provisions of section 56 of the Indian Railways Act, 1890. By applying the aforesaid tests, the Division Bench held in that case that the essential function of the petitioner was to carry passengers for fare and carry goods for freight and incidental and ancillary powers or authority had been given to it under the Railways Act to discharge those essential functions, and one of such incidental powers was disposal of unclaimed goods. The main function of the petitioner was not carrying on the business of selling goods and, therefore, when the petitioner effected sales of unclaimed and unconnected goods, it was not a "dealer", within the meaning of section 2(c) of the Act. Mr. Chowdhury had also placed strong reliance on the decision in the case of Royal Calcutta Turf Club v. Secretary of State for India reported in AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1973] 32 STC 171 (Cal), the Tribunal held that the sole activity of the assessee was transportation of freight and passengers by rail. Accordingly, the sales of surplus and discarded materials were only incidental to the activity of transportation and the main activity of the assessee in other cases cited was far from sale of goods. Mr. Samarendra Nath Bose, appearing for the sales tax authorities, admitted that the writ petition at this stage is premature and is not maintainable, as there is no assessment standing against the petitionerclub, as the Assistant Commissioner of Commercial Taxes had set aside the order passed by the Commercial Tax Officer and remanded the matter back to the Commercial Tax Officer, being the assessing authority for further adjudication and there is no liability pending. Next, Mr. Bose submitted that the petitioner is entitled to agitate this point in reference under section 21 of the Bengal Finance (Sales Tax) Act, 1941, for determination of pure question of law, as to whether the petitioner is a dealer or not, but the petitioner not having done so, is not entitled to move the writ petition by-passing that alternative remedy. Next, Mr. Bose submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted. Further, it was found that not only there was supply of refreshments to the club members, but also there was substantial sales to the stand members, who did not constitute the club at all. Accordingly, all supplies of goods to the stand members as well as to others who are not club members were held to have amounted to sales thereby becoming exigible to tax under the Act. Inasmuch as, the petitioner-club was held to be a "dealer" its sales of assets were held to be incidental and ancillary to its activities which attracted sales tax under the law. The appellate authority, however, remanded the matter before the Commercial Tax Officer (original assessing authority) for excluding the amount of supplies of refreshment to only the club members as such transactions did not constitute "sales" within the meaning of the Act. A fresh calculation of tax liability after such exclusion was directed in the appellate order by the learned Assistant Commissioner of Commercial Taxes, respondent No. 3. After placing the aforesaid statements from paragraph 7 of the affidavit, Mr. Bose, learned Advocate appearing for the taxing authority, submitted that since the entire matter has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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