Restaurant supply tax before 2 February 1983 depends on constitutional exemption and collection-and-deposit conditions.

Supply of food, snacks and beverages by restaurants, canteens and similar establishments for the period before 2 February 1983 was treated as falling within the constitutional exemption under section 6(2) of the Constitution (Forty-sixth Amendment) Act, 1982, despite the general taxing provision. Tax was not leviable unless it had been specifically collected on bills and deposited, or remained payable under a competent order. The Tribunal's construction was accepted as controlling for such pre-2 February 1983 transactions, and the tax liability was to be determined accordingly.

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Issues: Whether sales and services by restaurants, canteens and similar establishments for the period prior to 2 February 1983 were taxable under the Rajasthan Sales Tax Act, 1954, and whether exemption under section 6(2) of the Constitution (Forty-sixth Amendment) Act, 1982 was available where tax had not been collected from customers.

Analysis: The revision concerned transactions of serving food, snacks and beverages for consumption in restaurants and similar establishments during the period before 2 February 1983. The applicable legal position was governed by section 6(2) of the Constitution (Forty-sixth Amendment) Act, 1982, which gives effect to the constitutional exemption for such supply transactions notwithstanding the general liability created by section 6(1). The Tribunal's view was that such pre-2 February 1983 transactions were not taxable unless tax had been specifically collected on bills and deposited, or remained payable pursuant to a competent order. That construction was treated as controlling the present revision as well.

Conclusion: The Tribunal's approach was upheld and the assessee's tax liability was to be determined in accordance with the constitutional exemption and the collection-and-deposit condition. The revision failed.

Ratio Decidendi: For restaurant supply transactions prior to 2 February 1983, tax liability depends on the constitutional exemption under section 6(2) of the Constitution (Forty-sixth Amendment) Act, 1982, and tax not collected within the specified period is not leviable notwithstanding the general charging provision.

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