Composite restaurant coupon charges cannot be split to exclude service components from VAT where food supply is the taxable substance.

A composite amount collected through entry coupons for food in a restaurant cannot be artificially bifurcated to exclude part of the consideration from VAT where the coupon itself restricts adjustment to food. Separate accounting entries for cultural, maintenance or administrative heads do not change the substance of the receipt, if the charge is in reality consideration for supply of food. The RVAT definitions of sale and sale price were read to include the full consideration for food, including amounts charged for matters done in relation to that supply. The dominant supply or aspect theory was rejected on these facts, and the entire coupon amount was treated as taxable consideration.

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Issues: (i) Whether the amount collected through entry coupons, stated to be adjustable against food only, could be bifurcated to exclude part of the consideration from VAT. (ii) Whether the Tax Board was justified in deleting tax and interest despite the statutory definitions of sale and sale price under the RVAT Act.

Issue (i): Whether the amount collected through entry coupons, stated to be adjustable against food only, could be bifurcated to exclude part of the consideration from VAT.

Analysis: The assessee issued entry coupons showing a composite amount, but the coupon itself recorded that the amount was adjustable only against food. The books of account separately reflected part of that receipt under heads such as cultural receipts, maintenance and administrative expenses, yet the court treated this bifurcation as a deliberate window dressing. Since the amount charged from customers was, in substance, consideration for supply of food, the consideration could not be split merely because the assessee also provided additional entertainment or recreational facilities. The fact that separate charges were levied for other services did not alter the character of the coupon amount as consideration for food.

Conclusion: The bifurcation was impermissible and VAT was payable on the entire amount collected through the coupon.

Issue (ii): Whether the Tax Board was justified in deleting tax and interest despite the statutory definitions of sale and sale price under the RVAT Act.

Analysis: The definitions of sale and sale price under the RVAT Act were read together to mean that the full consideration paid for food, including any amount charged for matters done in relation to the supply, formed part of the taxable value. The principle laid down in the cited Supreme Court authority was applied that the price paid for supply of food in a restaurant cannot be split up to isolate alleged service components where the supply of food is the subject of levy. The contention based on dominant supply or aspect theory was rejected because the assessee separately charged for other services and the food component formed the major part of the coupon amount.

Conclusion: The Tax Board's deletion of tax and interest was unsustainable, and the levy was restored.

Final Conclusion: The revisions succeeded for the revenue, the order of the Tax Board was set aside, and the assessee remained liable on the full consideration collected through the coupon, with penalty maintained.

Ratio Decidendi: Where a composite amount is collected as consideration for supply of food, the taxable sale price includes the entire consideration and cannot be artificially split to exclude portions described as service or administrative charges when the statutory levy attaches to the supply as a whole.

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