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State of West Bengal v. Calcutta Club Limited

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 4184 of 2009)Decided 4 May 2016
Civil Appeal No. 4184 of 2009
Justice Dipak Misra · Justice Shiva Kirti Singh

Background

This is a referral order, not a final judgment. A sales tax notice was issued to a members' club for supplies of food and drinks to its permanent members. The West Bengal Taxation Tribunal and the Calcutta High Court held that the Club was not liable on the doctrine of mutuality, and the State appealed.

Decision Breakdown

This is a referral order, not a final judgment. The Court held that the controversy has to be authoritatively decided by a larger Bench. It framed three questions of law: whether the doctrine of mutuality survives the 46th Constitutional Amendment, whether Young Men's Indian Association still holds the field, and whether the amendment deems such club supplies to be a taxable sale. It directed that the papers be placed before the Chief Justice of India for constitution of an appropriate larger Bench.

Lesson Learnt

There is no final ruling yet on whether members' clubs owe sales tax on supplies to their own members. The question awaits a larger Bench.

Official source (sci.gov.in)View Judgment (PDF)

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