Composite hotel board charges: food supplied to residents was not a separate taxable sale under sales tax law.

Supply of food to hotel residents under a composite lodging and boarding charge was not a separate sale under the Orissa Sales Tax Act, 1947. A sale under section 2(g) requires transfer of property in goods for consideration, but the charging arrangement showed no separate agreement for food, no separate valuation, no rebate for non-use, and no right for the resident to deal with the food independently. The food supply was treated as an integral part of an indivisible contract for lodging and allied services, so it did not constitute a distinct taxable sale. Rule 90, which applies to separately sold meals and refreshments, did not change that result.

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Issues: Whether supply of food to hotel residents under a composite lodging and boarding charge constitutes a sale liable to tax under the Orissa Sales Tax Act, 1947.

Analysis: Sale under section 2(g) requires a transfer of property in goods for consideration. The charging arrangement showed no separate agreement for sale of food, no separate valuation of food, no entitlement to rebate for non-use, and no right in the resident to take the food elsewhere or transfer it to another. The supply of food formed an integral part of an indivisible contract for lodging and allied services, and did not amount to a distinct sale. Rule 90 of the Orissa Sales Tax Rules applied to separately sold meals, refreshments and similar articles and did not alter this conclusion.

Conclusion: The supply of food under the composite hotel arrangement was not a taxable sale, and the assessee was not liable to assessment on that supply.

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