Enhanced sales tax on restaurant food did not apply to takeaway sweet-stall sales without on-premises consumption facilities.

The enhanced sales tax proviso applying to articles of food and drink sold in a hotel, boarding house or restaurant was construed as covering sales intended for consumption on the premises where such facilities exist. A sweet-stall attached to a restaurant, selling sweets mainly for takeaway and lacking seating or similar consumption facilities, did not fall within that description merely because it formed part of the same business, shared a proprietor, or exchanged stock with the restaurant. Common preparation or operational connection did not change the character of the stall for this purpose, so the enhanced rate was not leviable on the sweet-stall turnover.

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Issues: Whether the turnover of a sweet-stall attached to a restaurant fell within the proviso to section 3(1)(b) of the Madras General Sales Tax Act so as to attract the enhanced rate of tax applicable to articles of food and drink sold in a hotel, boarding house or restaurant.

Analysis: The proviso applied only where the turnover related to articles of food and drink sold in a hotel, boarding house or restaurant. The expression was construed to mean sales of food and drink intended ordinarily for consumption at the place where facilities for such consumption are provided. A sweet-stall, where sweets are sold for takeaway and not for consumption on the spot, does not answer that description merely because it forms part of the same business or is run by the same proprietor as a restaurant. The absence of seating or similar facilities for consumption at the stall was material, and the common preparation of sweets or interchange of stock between the restaurant and the stall did not alter the character of the stall for the purpose of the proviso.

Conclusion: The sweet-stall turnover did not fall within the proviso to section 3(1)(b), and the enhanced rate was not leviable.

Final Conclusion: The appeal was unsuccessful, and the lower courts' view that the enhanced sales tax rate could not be imposed on the sweet-stall turnover was sustained.

Ratio Decidendi: For the purpose of the enhanced-rate proviso, food and drink must be sold in a place where they are ordinarily intended to be consumed on the premises; a takeaway sweet-stall is not treated as a restaurant merely because it is connected with one.

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