The High Court · 2025

Counsel for the Petitioner : SRl. S R R VISWANATH Counsel for the Respondent : Mr. T Chaitanya Kiran, Assistant GP Rep. Mr. Swaroop Oorilla, Spl. G.P. for State Tax. The Court made the following: ORDER IN'I'IIE I{TGH COURT FOR TT{B S'I'A'IE OF TBLANGANA AT I{YDERABAD 'TIIE IIONOURABLE SRI JUSTICE P.SAM KOSHY I\ND THE HONOURABLE SRI JUSTICE SUDDALA CI{ALAPATHI RAO TREVC No.282 of 2010 Da ted: 18.12.2025 Betrveen: M/s.Nizam Club, 5-9-5, Sai Iabad, Ilyderabad. AND The State of Andhra Pradesh, Rep. by the SR before STAT, II Floor, (lcl' Cornplex, Opp. Chenetha Bhavan, Nampally, I-lyderabad - 500 001. . . Petitioner . Respondent ORDER, Qtcr Hon'ble Sri.hsticc P.Sam Koshy) Heard Mr.S.R.R.Viswanath, learned counsel for the petitioner and Mr.T.chaitanya Kiran, learned Assistant Government Pleader representing Mr.Swaroop oorilla, learned Special c'overnment Pleader for State Tax. perused the record 2

2.The instant is the Tax Revision Case which has been filed assailing the order dated 05.07 .2010 in T.A.No. 159 of 2010 passed by STAT, Hyderabad.

3. The learned STAT videthe impugned order has dismissed the appcal preferred by the revision petitioner affrrming tlie order passed by the Authority for Clarification and Advance Ruling. The question of law put for consideration in this Tax Revision Case is as follows: ' " i) Whether on facts and law the Hon'blc Tribunal is right in saying that the pctitioner which is a Members Club is liable to tax on its suppliei offood and drinlc to its own members- ii) Whether the Hon'ble Tribunal is right in completell' overlooking the absolute mutualitv between the club and its members. iii) Whether Hon'ble Tribunol ,s right in distinguishing the provisions of APVAT Act fiom the provisions of the APGST Act and General Sales Tax Acts of other States when oll derive their validity and scope front entry 54 of List II in the Seventh Schedule to the Constitution. l i a I I I t 3 it,) LVhile so.ying thut the Advance Ruling ,4utlnritv had no authoritv to deternrine whether or ttot ,ot:titioner is a Members Club is [-lon'ble Tribunal rigltt in uplnltling the oclvunce ntlittg. "

4. Today r,vhen the rnatter is taken up for hearing, it has been brought to tlie notice of this Bench that earlier there was another batcli of 'l'ax Itevision Cases of similar nature in TREVC.No.68 of 2012 and batch which came Lrp for consideration before the Coordinate Bench of this Court on 16.02.2023, wherein the Division Bench of this Court taking into consideration the Larger Bench de;ision of the Hon'ble Supreme Court in the case of Stste of West llengal v. Calcutta Cluh Limitedt had decided the issues raised in this case and the issue has been decided in favour of the assessee and against the Revenue. For ready reference, we intend to reproduct: the relevant paragraph Nos.4 to 8 wherein it has been held as under: "4. When the above Revisions were taken up fot' hearing, Sri S.Du,arakanoth, learned Senior Cc,unsel appearingfor the petitionetis as^sessee would t ArR 2019 s(:c 5310 4 submit that the main question of law raised in the present revision cases viz., opplicability of 'principle of neutralil.\,' 6"rrtucn the petitioners ancl its members is squorel), covered by the decision o.f the Hon'bla Supremc (lourt in State of West Bengal ancl Others v. Calcutta Club Lirnited , wherein it was held that "the doctrine o.f Mutuality cotttirtues to be applicable ttt incorporated and unincorporated member's clubs even afier the 46th Constitutional Amenclment and sub-clausa (fl of Ar"ticle 366(29-A) to the Constitution of India hos no application to member's clubs.

5. 'l'tte Supreme Court in the dectsion oJ'Calcuttu Club Limitecl(supra) further held tlrut the judgment rendered in the case of Joint Commercial Taxes Officer, Harbour Division-ll, Madras v. Young Men's Indian Association, wherein applying the doctrine of mutualitlt it was held that supply offood by clubs to its members w'ould not amount to sale, continues to hold fietct even after tlte 46't' Amendrnent.

6. It is not in dispute that petitioner-clubs are incorporated and unincorporated member's clubs. Thus, having regard to the position cf law os enunciatecl by the Supreme Court, it is clear that the supply o.f food by the clubs, like petitioners, to ils rnembers cctnnot be conside,red as sale for being 5 subj,zcted trs tox undcr the Stute Sn/c-s Tax Enactment pos t co n.st i ttt t io nal ame ncl men t a l.so.

7. S,'i L.l/cnlioteshvvar Rutt, lcarned Special Standi ng C)otrtt.st'I up1tccrri ng .frtr the re.spctndettt-Stqte, doe:: not clisputa the abot,e propositirtn of law' holding thelield as on date.

8. Since the is.sue raised in the present Revision Cuscs i.s .scltmrel.rc'overec{ b.t' lhe lav' loid dov'rt by the Hon'ble Suprenta Court in C)alcuttct Club Limited (l sr.tp;'a), which bincls thfs Court undu Article l4l of the Constitttlion of lndio and olso since it is not shown to Lts of any subscquent deviation .t'rom the above pctsition, v,e ansy)er the clucstion qf law (a) raised in the present Revision Cases in.favour of the petitioners- ass?ssee. In viev' of ortr onsv'er to que.stion of law (a) rai:;ed, there is no nec'cssity to onsruer the other questions of lau, rcrised therein. "

5. 'to turther clarify the view of the Division Bench of this Court, it would also be relevant at this juncture to reproduce paragraph No.49 of the judgment of the Hon'ble Supreme Court in the Largr:r Bench, which again, fbr ready reference is reproduced herein: 6 "49. In light of the view that we have taken, it is unnecessary to advert to Slvi Dwivedi's argument.s thot the explanation (l) to Section 2(10) of the West Bengal Sales Tax Act is a stctnd-alone provision and rtot an explanatiort in the classical ..sense. We, tlrcrefore, answer the three questions posed by the Divisiort Bench in State of trl/est Bengal v. Calcutta Club Lintited (supra) asfollou,s: (l) T'he doctrine of ntutuality continues to be upplicable to incorporated and unincorporated members' clubs a.fter the 46th Amendment adding Article 366(29-A) to the Constitution of India. (2) Young ltlert's Indian Association (supra) and other judgments which applied this doctrine cctrttirure kt holcl the field even after the 46tlt Amendment, (3) Sub-clause fi of Article j66(29-A) has no application to members' clubs. "

6. Keeping in view the aforesaid judicial precedents, first by the Larger Bench of the Supreme Court and subsequent by Division Bench of this Court in identical set of facts, we are inclined to allow the present Tax Revision Case on similar terms and in the process, the question Nos. 1, 3 and 4 aforementioned stands answered in the negative and has been decided against the revenue and question No.2 stands answered in the affirmative holding that the T'ribunal has inlact completely overlooked the absolute rnutuality between the club and its rnembers and the question il; answered in fhvor.rr of assessee and against the Revenue

7. Lccordingly, the Tax Revision Case stands allowed. Consequently, miscellaneoirs petitions pending, if any, shall stand closed. There shall be no order as to costs //TRUE COPY/ SD/. I NAGA LAKSHMI JOINT REGISTRAR6 SECTION OFFICER To,

1.'The Serles Tax Appellate Tribunal. Hyderabad. 2. The State Representative, before sales Tax Appellate Tribunal,Hyderabad. 3. The Authority for Advance Railing, O/O.Commissioner of Commercial Taxes, Hyderitbad.

4. The Dr:puty Commissioner (CT), Abids Division, Hyderabad 5. The Commercial Tax Officer, Basheerbagh Circle,Hyderabad. 6. One CC to SRl. S R R VISWANATH Advocate [OPUC] 7. One C;C to Special Government Pleader for State Tax, High Court for State of Telanl;ana, Hyderabad. [OPUC]

8. Two C;D Copies Y< HIGH COURT DATED:1811212025 ., ORDER S 0 I rt8 202[ v z'. TREVC.INo.282 of 2010 -k ;* (; ALLOWING THE REVTSION CASE ,Rqub \c X,"'