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of <h1>Hotel counter sales exempt from sales tax under Bombay Sales Tax Act</h1> The court agreed with the Tribunal's interpretation that 'counter sales' at the respondent's hotel are covered by entry No. 14 of Schedule A to the Bombay ... - Issues Involved:1. Interpretation of the term 'served' under entry No. 14 of Schedule A to the Bombay Sales Tax Act, 1959.2. Applicability of sales tax exemption on 'counter sales' at the respondent's hotel.3. Legislative history and intent behind entry No. 14 of Schedule A.Detailed Analysis:1. Interpretation of the term 'served' under entry No. 14 of Schedule A to the Bombay Sales Tax Act, 1959:The primary issue revolves around the interpretation of the term 'served' in the context of entry No. 14 of Schedule A. The applicant's counsel argued for a narrow interpretation, suggesting that 'served' should mean to wait upon a person at a table or set food before them for consumption. The Tribunal, however, adopted a broader interpretation, concluding that 'served' should include food taken away by customers for consumption outside the hotel. The court found that the plain reading of entry No. 14 requires that cooked food and non-alcoholic drinks must be served for consumption at or outside the eating establishment, without necessitating that they be served at the place of consumption.2. Applicability of sales tax exemption on 'counter sales' at the respondent's hotel:The Sales Tax Officer had initially taxed the counter sales, estimating them at 3% of the turnover. The Tribunal, however, ruled that these counter sales were exempt under entry No. 14. The court upheld the Tribunal's decision, emphasizing that the exemption applies as long as the food and drinks are served for consumption at or outside the eating establishment, and the price does not exceed one rupee per person. The court rejected the narrow interpretation that would exclude counter sales from the exemption.3. Legislative history and intent behind entry No. 14 of Schedule A:The court extensively reviewed the legislative history to ascertain the intent behind entry No. 14. It noted that earlier versions of the sales tax laws required food to be consumed at the place where it was served to qualify for exemption. This caused administrative difficulties and hardships, leading to the revised wording in the 1959 Act, which extended the exemption to food served for consumption outside the eating establishment. The court concluded that the legislative intent was to broaden the scope of the exemption to include food taken away for consumption, thus supporting the Tribunal's broader interpretation of 'served.'Conclusion:The court answered the reference in the affirmative, agreeing with the Tribunal's interpretation that 'counter sales' at the respondent's hotel are covered by entry No. 14 of Schedule A and are exempt from sales tax. The court emphasized the broader legislative intent to alleviate administrative difficulties and extend the exemption to food served for consumption outside the eating establishment. The applicant was ordered to pay the costs of the reference to the respondent.
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