Turnover threshold for cooked food and beverages applies only to that commodity, not total hotel turnover.

For Entry 57 of the Kerala General Sales Tax Act, 1963, the turnover threshold of twenty lakhs rupees applies only to cooked food and beverages sold or served in hotels and restaurants, not to the establishment's total turnover. Sales of other items such as fruits, breads and biscuits cannot be aggregated with cooked food turnover to test the threshold. The assessing authority must therefore compute taxability on the basis of the turnover of the specified commodity alone and also verify whether the alleged sales to Indian Airlines were actually made by the assessee. The assessment was required to be reconsidered on that basis.

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Issues: Whether, for the purpose of Entry 57 of the First Schedule to the Kerala General Sales Tax Act, 1963, the turnover threshold of twenty lakhs rupees refers to the turnover of cooked food and beverages alone or to the total turnover of the hotel or restaurant.

Analysis: Entry 57 taxes cooked food including beverages sold or served in hotels and restaurants at the first point of sale, but makes taxability in the case of ordinary hotels and restaurants dependent on turnover of twenty lakhs rupees and above. The proper construction of the entry is that the word "turnover" refers to the turnover of the particular commodity, namely cooked food and beverages, and not the overall turnover of the establishment. Sales of other articles such as fruits, breads and biscuits cannot be clubbed with the turnover of cooked food for deciding the threshold. On that construction, the assessing authority must also examine whether the alleged sales to Indian Airlines were in fact made by the assessee.

Conclusion: The threshold under Entry 57 has to be applied only to the turnover of cooked food and beverages, and not to the total hotel turnover. The matter was required to be reconsidered by the assessing authority on that basis.

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