COMMISSIONER OF SALES TAX Vs. HUKUMCHAND MILLS LTD

JUDGEMENT

(1.) TO tax or not to tax is the question. On applications of the Commissioner of Sales Tax, Madhya Pradesh under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958 (for short 'the Act'), the Board of Revenue operating as a Tribunal under the Act, has referred the under noted common question of law, arising out of its common order dated 17-4-1982 passed in Appeals, Nos. 37, 49, 50 and 231/pbr/1981 and order dated 20-12-1985 passed in Appeal No. 63/pbr/1985 preferred by the assessee for the Assessment Years of 1974, 1975, 1976 and 1978, in these four cases which are heard analogously and are being disposed of by this common order :

(2.) INITIALLY, these cases were laid before the Division Bench of this Court where it was pointed out that two Division Bench decisions reported in (1987) 20 VK. N. 351, Commissioner of Sales Tax, M. P. v. Hukumchand Mills Ltd. , Indore decided on 4-9-1987 and in (1989) 3 Tax Law Decisions 106, Commissioner of Sales Tax, M. P. v. Gwalior Rayon Silk Mfg. Co. Ltd. , Nagda decided on 21-11-1988 are in conflict. On that fulcrum the Division Bench ordered on 12-4-1989 to place these cases before Larger Bench. This is how these cases were listed before us.

(3.) FACTUAL matrix is in narrow compass and is without conundrum. The non-applicant/assessee is a Textile Mill. It is incorporated under the Companies Act and carries on the business of manufacture and sale of cloth and yarn. It has a Canteen for its workers located in the premises of the Mill. Food stuff is served in this Canteen to its workers. It was assessed to Sales Tax for Assessment Years 1974, 1975, 1976 and 1978. The Additional Assistant Commissioner of Sales Tax, Indore being Assessing Authority, held the Canteen Sales as exigible to Sales Tax (annexures-'b' and 'b/1' to 'b/3' ). First Appeals, preferred under Section 38 (1) of the Act before Appellate Deputy Commissioner of Sales Tax, proved to be vainful (annexures 'c and 'c/1' to 'c/3' ). The contention, that the assessee was under legal obligation to maintain the Canteen in terms of Section 46 of the Factories Act, 1948 and was providing only service, not sale, to its employees on non-profit basis as a welfare activity and thus was not liable to pay Sales Tax on canteen sales, was not accepted. The assessee, undaunted by unsuccess, then filed second appeals under Section 38 (2) of the Act before the Tribunal which were registered as Nos. 37, 49, 50 and 231/pbr/1981 and 63/pbr/1985. These appeals succeeded on the question of canteen sales (Annexure-'d') Dissatisfied, the Commissioner of Sales Tax resorted to Section 44 (1) of the Act and filed applications, registered as Nos. 60-PBR/82, 61-PBR/82, 62-PBR/82 and 6-PBR/86 against orders dated 17-4-1982 and 20-12-1985 rendered in aforesaid appeals and secured the references. These references were registered in this Court for our opinion.