Validating amendments brought restaurant food supplies within tax levy for prior assessment years despite earlier exemption view.

Restaurant supplies of food were treated as within the constitutional concept of tax on the supply of food or drink in the course of service after Article 366(29A)(f) expanded the field of levy. The Forty-sixth Amendment, including section 6(2)(b), validated prior assessments for the relevant period, and the Bihar Finance Act, 1981 was amended by section 2(t)(vi) and section 60A(2)(b) to mirror that validation scheme. The text explains that these validating provisions supplied statutory sanction to the challenged assessments, so the earlier view that such restaurant transactions were outside the sales tax net could not defeat the levy for the covered assessment years.

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Issues: Whether sales tax was payable on food served and consumed in the restaurant; and whether the Constitution (Forty-sixth Amendment) Act, 1982 together with the amendment to the Bihar Finance Act, 1981 validated the levy on such supplies for the assessment years in question.

Analysis: Prior to the constitutional amendment, restaurant transactions of this nature had been treated as outside the sales tax net on the footing that the dominant purpose was sale of food and that the service element was merely incidental. Article 366(29A)(f) of the Constitution of India expanded the definition of tax on the supply of food or drink in the course of service, and section 6(2)(b) of the Constitution (Forty-sixth Amendment) Act, 1982 validated the levy for the relevant past period, subject to the conditions stated therein. The Bihar Finance Act, 1981 was correspondingly amended by section 2(t)(vi) and section 60A(2)(b), which reproduced the constitutional validation scheme and gave statutory sanction to the assessments challenged in the writ petition.

Conclusion: The levy on the food supplied in the restaurant stood validated, and the assessment orders were not sustainable to be quashed on the ground urged by the petitioner.

Final Conclusion: The writ petition succeeded and the impugned assessment orders were set aside in view of the validating amendments, thereby leaving the petitioner free from the disputed tax demands for the periods covered by the challenge.

Ratio Decidendi: Where a constitutional amendment and a corresponding statutory amendment expressly validate prior tax assessments on restaurant supplies of food, the assessments cannot be quashed on the basis of the earlier judicial position that such transactions were not taxable.

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