RANCHI CLUB LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) BY this petition under Article 226 of the Constitution of India, petitioner No. 1 M/s. Ranchi Club Limited, which is a company registered under the Companies Act, 1956, having its registered office at Main Road, Ranchi, and petitioner No. 2, Harish Wadhwani, Honorary Secretary of the Club and who is a resident of Ranchi, seek a declaration that the provisions of the Bihar Finance Act, 1981 and Bihar Sales Tax Rules, 1983 (hereinafter to be referred to as the Act and the Rules, respectively) do not apply to the petitioner Club as the petitioner Club is not doing any business of sale and, as such, is not a dealer, and so periodical submissions of returns by the Club to the respondent Sales tax authorities for the purpose of assessing sales tax do not arise.

(2.) BY filing a supplementary affidavit, an additional prayer is made on behalf of the petitioner for quashing the communication order dated 30.9.97, which is at Annexure 3 to this petition.

(3.) IT s also submitted that no sooner the legal position came to the knowledge of the petitioner that the activities of the Club do not come within the purview of 'sale' as defined under Section 2(t) of the Act, and, as such, the petitioner is not required to be assessed for the purpose of paying sales tax, under the Act and the rules framed thereunder, the petitioner immediately filed an application on 14.8.97 before the Deputy Commissioner of Commercial Taxes, East Circle, Ranchi Respondent No. 3, for cancellation/recalling of dealership and also' for refund of the tax amount already paid by the petitioner including penalty, etc. for the past assessment years. This application for refund and cancellation/recalling of dealership was purported to be one under Section 14 read with Section 23 of the Act. The said application is based on the fact that the petitioner Club is a Member's Club operating on the principle of agency and having its relationship with individual members based on the doctrine of 'mutuality'. To support this proposition, a copy of the Memorandum and Articles of Association has been annexed with this petition as Annexure '1'.