VEERASWAMI, J.

In the first of the petitions the propriety of levy of sales tax on the sales by the Cosmopolitan Club of tiffin to its members arises. In Deputy Commercial Tax Officer, Triplicane Division v. Cosmopolitan Club 1955 ILR(Mad) 1042), a Division Bench of this Court expressed the view that inasmuch as such sales were not in the course of business they were not taxable. The other aspect as to whether the club being an incorporated body, the transactions could not be regarded as sales by the incorporated body to its members as contrasted with similar transactions between a non-incorporated proprietary or other types of clubs to their members was not specifically decided but left open. In view of this decision an Explanation to the definition of dealer and another Explanation to the definition of sale have since been incorporated. Under the Explanation the sales falling within its purview need not be in the course of business. The Explanation to the definition of dealer deems certain persons who sell not in the course of business to be dealers for purposes of the Act. In the course of arguments in these petitions reliance is placed upon a decision of Mack, J., in Cosmopolitan Club, Madras v. Deputy Commercial Tax Officer where the learned Judge held :

"A sale therefore must in the first place be a transfer of property in goods. I hold that the supply of refreshments in a members' club such as this registered under section 26 of the Companies Act, purchased out of club funds, composed of members' subscriptions is not a transfer of property from the club as such to a member." *

This point, as I said, was not specifically decided but left open by the Division Bench in the earlier case just referred to. But the learned Judges at the same time made certain observations which appear to support the view Mack, J., took. The point is one of great importance and on first impressions, I must say, I find myself unable to agree with that view of Mack, J. It is desirable, therefore, that the point is decided by a Division Bench. The papers in the three writ petitions will be placed before my Lord the Chief Justice, for the purpose.In pursuance of the abovesaid order of reference, the writ petitions came on for hearing before a Division Bench consisting of Ramachandra Iyer, C.J., and Anantanarayana Iyer, J., and the Court delivered the following Judgment :-

JUDGMENT

W.P. Nos. 129 and 130 of 1960.

The Judgment was delivered by

RAMACHANDRA IYER, C.J. - The Young Men's Indian Association is society registered under the provisions of Act XXI of 1860. It has for its object the improvement of the moral, physical and educational standards, and the integration of the outlook of the students with a view to make them true citizens of our country. To achieve this object the Association has provided certain residential facilities for young men studying in the metropolis, a library with a reading room and certain recreational facilities. Incidental thereto or even as a necessary adjunct, there is a mess and a canteen serving the needs of the members of the Association. Any member can bring a guest but the duration of his stay in the hostel or of enjoying the benefits of the cuisine is limited and restricted by the rules; the food, snacks and beverages taken by the guest is paid for by the member who brings him. The arrangement by which the members are charged for the food and refreshments is not a matter of controversy. The necessary articles for their preparation are purchased by the employees of the Association and the cost and expenses incurred for their preparation, inclusive of the salary of cooks, servers etc., are totalled up and divided among the members participating in the mess. No profit is made by the Association in providing this amenity to its members. There was an attempt on the part of the Commercial Tax Department of the Government of Madras in respect of the years 1951-52 to 1953-54 to levy sales tax on the Association by