Restaurant and luxury tax liability upheld for cinema bars serving refreshments with air-conditioning to patrons.

A cinema premises bar serving snacks, ice-cream and drinks to ticket-holding patrons was treated as a restaurant within the wide statutory definition, and the presence of air-conditioning in the relevant area satisfied the element of luxury; luxury tax under section 4 was therefore attracted. The constitutional challenge under Articles 14, 19(1)(g) and 265 failed because the levy on luxury was held permissible and the discrimination plea was unsupported on the material before the Tribunal. The assessment was also upheld, as the survey report, local inspection and objections were considered and the dispute over measurement was treated as factual. The levy and assessment were sustained.

---

---

Issues: (i) whether the two bars in the cinema premises fell within the statutory definition of a restaurant and were provided with luxury so as to attract levy under section 4 of the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972; (ii) whether the levy was discriminatory or otherwise unconstitutional under Articles 14, 19(1)(g) and 265 of the Constitution of India; and (iii) whether the assessment was invalid for want of proper consideration of the survey material and the appellants' objections.

Issue (i): whether the two bars in the cinema premises fell within the statutory definition of a restaurant and were provided with luxury so as to attract levy under section 4 of the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972.

Analysis: Section 4 levies luxury tax on a hotel or restaurant in which there is provision for luxury. The definition of restaurant in section 2(h) is wide enough to include an eating house. On the findings recorded in the appellate order, snacks, ice-cream and drinks were sold from counters within the disputed area and were available to cinema-goers with tickets. Refreshments need not consist of cooked food, and a place serving refreshments to a class of the public on the premises answers the statutory description. The admitted existence of air-conditioning during the relevant assessment period satisfied the definition of luxury in section 2(d), which covers air-conditioning in any part of a hotel or restaurant.

Conclusion: The bars were rightly treated as a restaurant provided with luxury and were exigible to luxury tax under section 4.

Issue (ii): whether the levy was discriminatory or otherwise unconstitutional under Articles 14, 19(1)(g) and 265 of the Constitution of India.

Analysis: The challenge based on Article 265 and lack of legislative competence was not pressed. The challenge under Article 19(1)(g) was rejected in view of the settled position that a levy on the provision for luxury is constitutionally permissible. The discrimination plea under Article 14 failed because the rival factual claims regarding comparable cinema bars could not be resolved in the petitioners' favour on the material placed before the Tribunal.

Conclusion: The constitutional challenge failed.

Issue (iii): whether the assessment was invalid for want of proper consideration of the survey material and the appellants' objections.

Analysis: The assessment was based on a survey report and the appellate authority had also made a local inspection before affirming the finding on the taxable area. The record did not support the contention that the objections were ignored or that the order was non-speaking. The dispute over exact measurement was treated as one of fact and no ground was made out to disturb the departmental determination.

Conclusion: The assessment was not shown to be arbitrary or invalid.

Final Conclusion: The levy and assessment were upheld, and the application was dismissed.

Ratio Decidendi: A premises serving refreshments to ticket-holding cinema-goers and having air-conditioning in the relevant part during the assessment period constitutes a restaurant provided with luxury for the purpose of levy under the Act.

---