Restaurant food service as integrated hospitality, not sale, cannot be taxed as goods under sales tax law.

Food and beverages supplied in a restaurant or snack-bar for consumption within the premises, with seating, furniture, cooling, crockery, cutlery, cleaning and related amenities, are treated as part of an integrated service rather than as goods sold to the customer. On that basis, the transaction does not amount to a sale exigible to sales tax under section 2(h) of the Punjab General Sales Tax Act, 1948. The commentary also notes that a writ petition may not be rejected on alternate-remedy grounds where the matter has remained pending for a substantial period and the authority proceeds on an erroneous assumption of jurisdiction.

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Issues: (i) Whether the writ petition was liable to be rejected on the ground of availability of an alternative statutory remedy. (ii) Whether the service of food and beverages in the petitioner's restaurant or snack-bar constituted a sale exigible to sales tax under section 2(h) of the Punjab General Sales Tax Act, 1948.

Issue (i): Whether the writ petition was liable to be rejected on the ground of availability of an alternative statutory remedy.

Analysis: The objection based on alternate remedy was not accepted because the petition had already remained admitted for a substantial period, the authority was proceeding on an erroneous assumption of jurisdiction, and the controversy raised a question that was treated as virtually res integra. In such a situation, relegating the petitioner to the assessment and appellate machinery was held to be unjustified.

Conclusion: The objection based on alternate remedy was rejected in favour of the petitioner.

Issue (ii): Whether the service of food and beverages in the petitioner's restaurant or snack-bar constituted a sale exigible to sales tax under section 2(h) of the Punjab General Sales Tax Act, 1948.

Analysis: The decisive consideration was that the eatables and beverages were supplied for consumption within the premises as part of a composite service that included seating, furniture, cooling arrangement, crockery, cutlery, cleaning, and other amenities. The customer did not acquire the food as merchandise for independent dealing, and the transaction was held to be one of service and hospitality, not transfer of property in goods. The reasoning followed the principle that supply of meals in such establishments is essentially ministry to bodily want, and the burden to establish a taxable sale lay on the revenue.

Conclusion: The supply of food and beverages in the petitioner's establishment was not a sale and was not exigible to sales tax.

Final Conclusion: The impugned notices were quashed and the petitioner obtained complete relief against the proposed sales tax action.

Ratio Decidendi: Where food and beverages are supplied in a restaurant as part of an integrated service and are consumed within the premises, the transaction is one of service and not a sale, so it cannot be taxed as a transfer of property in goods under section 2(h) of the Punjab General Sales Tax Act, 1948.

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