Dominant object test governs hotel food turnover tax, requiring factual scrutiny of whether the transaction is sale or service.

Turnover from food, eatables and beverages supplied by hotels was taxable only where the substance of the transaction was a sale and any service element was merely incidental. The constitutional expansion of the definition of sale did not dispense with the need to examine the actual nature of the transaction on the facts. Because the assessing authorities relied only on the enlarged definition and did not determine whether the supplies were to outsiders, packet or parcel sales, or composite lodging-and-boarding charges, the assessment orders could not stand. The writ petitions were allowed, the assessments were quashed, and the matters were remanded for fresh consideration applying the dominant object test.

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Issues: Whether the turnover from food, eatables and beverages supplied by hotel establishments was taxable as a sale, and whether the assessments required fresh consideration on the basis of the dominant object of the transaction.

Analysis: The legal position applied was that if the substance of the transaction in a hotel is sale of food and the rendering of service is merely incidental, the turnover is exigible to sales tax. The constitutional amendment enlarged the field of taxation, but liability still depended on whether, on the facts, the dominant object was sale or service. The assessing authorities had proceeded only on the enlarged definition of sale and had not examined the accounts to determine whether the petitioners sold food to outsiders or effected packet and parcel sales, or whether the composite charges were essentially for lodging and boarding service.

Conclusion: The assessments could not stand as they were made. The writ petitions were allowed, the assessment orders were quashed, and the matters were remanded for reassessment by applying the dominant object test and the factual distinction between service and sale.

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