Restaurant food supply taxability after constitutional amendment and Bihar legislation left sales tax assessments legally supported.

The Forty-sixth Constitutional Amendment validated tax on the supply of food or other consumables for consideration, and Article 366(29A)(f) gave that levy constitutional force. Section 6 of the Constitution (Forty-sixth Amendment) Act, 1982 provided only limited exemptions, while the Bihar Finance Act was later amended to include restaurant food supplies within the tax net. In that statutory setting, sales tax assessments on food supplied and consumed in restaurants were no longer open to challenge on the ground that no sales tax was payable, and the challenge failed.

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Issues: Whether the sales tax assessments on food supplied and consumed in the restaurant could be sustained in view of the constitutional and statutory amendments.

Analysis: The dispute turned on the effect of the Forty-sixth Constitutional Amendment, which inserted Article 366(29A)(f) and validated the levy of tax on the supply of food or other consumables for consideration. The amendment was given further effect by section 6 of the Constitution (Forty-sixth Amendment) Act, 1982, which contained a specific exemption only for the supplies described in section 6(2)(a) and section 6(2)(b). The Bihar Finance Act, 1981 was correspondingly amended by the Bihar Finance Act, 1984 with effect from 1 April 1984, including section 2(t)(vi) and section 60A(2)(b). In that statutory setting, the assessments questioned in the writ petitions were no longer open to challenge on the basis that no sales tax was payable on restaurant food supplies.

Conclusion: The tax assessments were held to have statutory support after the constitutional and legislative amendments, and the challenge to them failed.

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