Composite restaurant sales tax treatment confirmed where food, drinks and service charges were not separately segregated.

Food and drinks supplied in a restaurant formed part of a composite taxable sale where the charges were not separately segregated, and the price could not be split into separate elements for food and service. Applying binding precedent on restaurant sales, the Madras HC found the Tribunal's view consistent with the governing law and declined interference in revision. The challenge to the taxability of the restaurant turnover therefore failed, and the Revenue's position was upheld.

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Issues: Whether the turnover from supply of food and drinks in a restaurant was liable to tax as part of the composite sale and whether the revision against the Tribunal's order deserved interference.

Analysis: The Court held that the controversy was covered by the binding precedent on restaurant sales of food and drinks, under which the supply of food and drinks forms part of a taxable sale and the composite price cannot be split into separate elements for food and service where the charges are not separately segregated. On that basis, the Court found the Tribunal's view consistent with the applicable law and saw no reason to interfere in revision.

Conclusion: The challenge to the taxability of the restaurant turnover failed and the revision was dismissed in favour of the Revenue.

Ratio Decidendi: Where the supply of food and drinks in a restaurant is part of a composite transaction and the charges are not separately segregated, the entire turnover is exigible to sales tax.

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