Service charges collected with food price form part of composite sale consideration and are includible in taxable turnover.

Compulsorily collected service charges taken along with the price of food served were treated as part of the composite sale consideration and not as voluntary tips at the customer's discretion. Because the charges had no independent existence separate from the sale transaction, they were regarded as an addition to the price of the articles supplied and served. On that reasoning, the service charges were included in the taxable turnover, and the assessee's challenge failed.

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Issues: Whether the service charges collected by the assessee could be included in the taxable turnover.

Analysis: The service charges were collected compulsorily along with the price of the articles served and were not comparable to voluntary tips paid at the customer's discretion. They formed part of the composite amount payable for the food supplied and served, and had no independent existence separate from the sale transaction. The earlier view treating such charges as an addition to the price was followed and approved.

Conclusion: The service charges were rightly included in the taxable turnover, and the assessee's contention failed.

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