Bar attached hotel classification depends on the hotel liquor licence regime, not mere beer sales in the premises.

Liability under entry 40 of the Kerala General Sales Tax Act depended on whether the premises satisfied the statutory description of a bar attached hotel. Before the 1999 amendment, that expression was read with the Foreign Liquor Rules: an F.L.3 licence covered a hotel or restaurant authorised to serve foreign liquor, while an F.L.13 licence was only a pub-beer parlour licence. A premises holding only F.L.13 licences during the relevant years could not be treated as a bar attached hotel merely because beer was sold there. The revised assessments based on entry 40 therefore could not stand.

---

---

Issues: Whether a hotel holding only an F.L.13 beer parlour licence, and not an F.L.3 hotel licence, could be treated as a bar attached hotel for levy of tax on cooked food and beverages under entry 40 of the First Schedule to the Kerala General Sales Tax Act, 1963.

Analysis: The liability under entry 40 turned on whether the establishment answered the statutory description of a bar attached hotel. Before the amendment by Act 23 of 1999, the entry did not contain the wider explanation later inserted with effect from 1 April 1999. The Court therefore examined the meaning of the expression in the light of the relevant licensing scheme. Rule 13(3) of the Foreign Liquor Rules, 1982 showed that an F.L.3 licence was the licence for a hotel or restaurant authorised to serve foreign liquor and was tied to star-hotel or similarly classified premises, whereas an F.L.13 licence was only a pub-beer parlour licence issued to specified joint-sector entities. The assessee had only F.L.13 licences during the relevant years and obtained F.L.3 only from 1 April 1998. The earlier licensing position did not justify treating the assessee as a bar attached hotel merely because beer was sold in the premises.

Conclusion: The assessee was not a bar attached hotel during the relevant assessment years, and the revised assessments based on entry 40 could not stand.

Final Conclusion: The revisions failed, and the Tribunal's view in favour of the assessee was affirmed.

Ratio Decidendi: For the period before the 1999 amendment, a bar attached hotel under entry 40 meant a hotel or restaurant licensed to serve foreign liquor under the applicable hotel licence regime, and a mere F.L.13 beer parlour licence did not suffice.

---