The main legal point established is that the supply of goods by an unincorporated association to its members for valuable consideration is taxable under the Tamil Nadu General Sales Tax Act, in accordance with Article 366 Clause 29-A(e) and (f) of the Constitution.

(Writ petition filed under Article 226 of the Constitution of India for the issue of writ of certiorarifed mandamus to call for the records of the fourth respondent in O.P. No.2130 of 1998 and to quash the order therein dated 15.12.1998 and further direct the respondents not to treat the transactions between the petitioner's association and it's members liable to tax under the provision of the Tamil Nadu General Sales Tax Act, 1959.)

R. Jayasimha Babu, J.

The petitioner had imported wattle extract in bulk and after collecting the value thereof from such of it's members who had desired the import to be made, made over to them the wattle extract in the quantity desired by the member. The orders on the foreign buyer was placed by the petitioner, and all documentation concerning the import were in the name of the petitioner. The payment to the foreign supplier was made by the petitioner. The delivery made by it to it' s members was made after collecting from them the consideration. The petitioner contends that the allotment and delivery so made by it to it's participating members for consideration does not result in a taxable sale.

2. Petitioner had contended before the Tribunal to which the writ petition that had been filed before this Court was transferred, that Section 2(n)(v) of the Tamil Nadu General Sales Tax Act which provides for levy of tax on supply of goods on unincorporated association to it's members for valuable consideration was unconstitutional. In this petition which challenges the order of the Tribunal dismissing the petition before it, question of alleged unconstitutionality was not argued. Petitioner now accepts the constitutionality of that provision.

3. Mr. M.L.Verma, learned senior counsel for the assessee submitted that the law declared by the apex Court in the decision rendered by a six member Bench of the apex Court in the case of Joint Commercial Tax Officer vs. Young Men's Indian Association, (1970) 26 STC 241, would squarely apply to the facts of this case, and that the law so declared is still good law, notwithstanding the subsequent amendment to Article 366 of the Constitution and the introduction of Clause 29-A therein, and the amendments thereafter made to the definition of `sale' in Section 2(n) of the Tamil Nadu General Sales Tax Act ( the Act).

4. The question considered by the Court in that case was "whether the supply of the various preparations by each club to it's members involved a transaction of sale within the meaning of the Sale of Goods Act,1930". That question was answered in the negative in the light of the law, as it then stood, which law has also been set out in the judgment thus:-

"The State Legislature being competent to legislate only under Entry 54, List II of the Seventh Schedule of the Constitution, the expression "Sale of Goods" bears the same meaning which it has in the aforesaid Act".

In the light of that position of law, the Court held thus:-

"Thus inspite of the definition contained in Section 2 (n) read with Explanation I of the Act, if there is no transfer of property from one to another there is no sale which would be exigible to tax".

5. Subsequent to that judgment, the scope of the expression " Sale of Goods" has been expanded by the amendment effected to Article 366 by the Constitution 46th Amendment Act, 1982, which introduced Clause 29-A therein. That clause, incorporated an expanded definition of the expression, `tax on the sale or purchase of goods'. Of the six sub-clauses therein, the last two sub-clauses (e) and (f) are relevant for the purpose of this case. (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply by way of or as part of any service, or in any other manner whatsoever, of goods, being food, or any other article of human consumption or any drink (whether or not intoxicating) where such supply or service, is fo