Service-based food and beverage receipts were not taxable before 3 February 1983 under the pre-amendment sales tax law.

Receipts from supply of food and beverages by a hotel, restaurant or employees' canteen, when rendered as part of services, were outside sales tax for assessment periods before 3 February 1983. The Constitution (Forty-sixth Amendment) Act, 1982 enlarged taxing competence through Article 366(29A), but that enlargement was only enabling and did not itself impose liability for earlier periods. The U.P. Sales Tax (Amendment and Validation) Act, 1985 was brought into force from 3 February 1983, and the validation provision operated only from that date under the amended law. Pre-amendment transactions remained governed by the earlier statutory position.

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Issues: Whether receipts from supply of food and beverages by a hotel, restaurant or employees' canteen were taxable as sales for assessment periods prior to 3 February 1983, in view of the Constitution (Forty-sixth Amendment) Act, 1982 and the U.P. Sales Tax (Amendment and Validation) Act, 1985.

Analysis: The turnover in question was found to relate to supply of food and beverages as part of services, and for the relevant assessment years the applicable U.P. Sales Tax Act definition of sale did not extend to such service-oriented supplies. The constitutional amendment by insertion of Article 366(29A) enlarged the State's legislative competence to tax such transactions, but it was enabling in character and did not by itself impose tax for earlier periods. The U.P. amendment was consciously brought into force only from 3 February 1983, and the validation clause was held to operate only in relation to transactions conforming to the amended principal Act from that date onwards. Earlier transactions continued to be governed by the pre-amendment law and the existing judicial position.

Conclusion: Receipts for supply of food and beverages by way of rendering services were not taxable for periods prior to 3 February 1983; the revisions failed.

Final Conclusion: The Tribunal's view was upheld and the revisions were dismissed, leaving pre-3 February 1983 service-based food and beverage receipts outside sales tax.

Ratio Decidendi: A constitutional expansion of taxing power and a later validating amendment do not, by themselves, fasten tax liability for earlier periods unless the State legislation expressly gives retrospective operation to the wider definition of sale.

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