TaxTMI 
TaxTMI 
1975 (8) TMI 119
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....e notifications is to impose a special sales tax on cooked food, including Indian sweets, tea and coffee, when sold as beverages, dahi and lassi at the rate of 10 per cent in respect of a dealer whose annual gross turnover during the preceding financial year exceeded Rs. 1,00,000. It is worthwhile to mention here that previously by two Notifications bearing Nos. STGL-J-2042/68-12568-F.T. and STGL/ 68-12570-F.T. dated the 27th December, 1968, published in the Bihar Gazette dated the 28th December, 1968, these items had been exempted from the levy of either general sales tax or special sales tax by the State Government under the powers conferred on it by section 4(3) of the Bihar Sales Tax Act, 1959 (Bihar Act 19 of 1959). The two impugned notifications have been made effective from the 1st day of April, 1972, and in pursuance thereof notices have been issued by the commercial taxes department to the petitioners to produce their account books from the 1st April, 1972, onwards. All the petitioners claim to be dealers having an annual gross turnover exceeding Rs. 1,00,000 each during the preceding financial year and thus they feel aggrieved by the notifications which have been challeng....
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....ing comfortable they provide several amenities to such customers including service of meals (cooked food), sweets, tea, coffee, dahi, lassi, etc., as and when demanded by such customers. In most of the cases (underlining* is mine) the bill of such stay of customers is inclusive and charged in a consolidated manner for boarding and lodging including service of sweets, tea, coffee, dahi and lassi. In the case of restaurant business the customers get principally the amenities of service along with the items of food demanded by them and the bill paid by them is one and indivisible in respect of price of eating materials as well as the service which includes items like linen services by liveried bearers, etc. The petitioners have been running the hotel and the restaurant business and had been paying sales tax on almost all raw materials required for cooking food and preparation of sweets including dahi and lassi at varying rates prescribed by the Government. These are the relevant and essential facts as alleged in the petitions. 5.. Counter-affidavits have been filed on behalf of the respondents in C.W.J.C. No. 1014 of 1972 and C.W.J.C. No. 47 of 1973. In the course of Here italicise....
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....nly, it is difficult for me to hold in exercise of our writ jurisdiction that any of the petitioners is either wholly or partly (which part is distinct) engaged in the business of a hotelier. 7.. Faced with this difficulty, Mr. Ghose urged that even in the cases of restaurants the principle to be applied would be the same and that the ratio of the judgment of the Supreme Court in the Associated Hotels' case[1972] 29 S.T.C. 474 (S.C.); A.I.R. 1972 S.C. 1131. covers the cases of restaurants with equal force as those of hoteliers. In my view, this submission of the learned counsel is rather a sweeping generalisation of the principle laid down by their Lordships meant to apply to the cases of hoteliers where service of the hoteliers, in the performance of which meals are served as part of, and incidental to, such amenities, is regarded as essential in all well-conducted hotels. The bill prepared by the hotel is one and indivisible, not being capable, by approximation, of being split up into one for residence and the other for meals. It was such type of cases that their Lordships were seized with in the Associated Hotels' case[1972] 29 S.T.C. 474 (S.C.); A.I.R. 1972 S.C. 1131. The le....
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.... and such a guest was one for the latter to stay and not one of sale of foodstuffs supplied as one of the incidental amenities, (iv) the bill given by the company and paid by the guests was one and indivisible, i.e., a fixed amount per day during their stay in the hotel and did not consist of separate items in respect of the several amenities furnished to them including meals served to them and (v) the transaction so entered into did not envisage any sale of food since the guests could not demand a rebate or deduction if they were to miss a meal or meals nor were they entitled to carry away or deal with in any manner, the food served at their table and it was, on the contrary, the management which had the right to deal with such unconsumed remainder as it liked. Such a position, therefore, being inconsistent with a sale under which the property in the whole must Here italicised. pass to the purchaser and who could deal with the remainder in any manner he liked, it was this part and sort of business in respect of which immunity was claimed by the company from sales tax. As would appear from the report of the case, at the High Court stage, as reported in State of Punjab v. Associated....
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....the foodstuffs passes to the customer the moment the foodstuffs are supplied and the price thereof is paid to the restaurant. The primary purpose of such a transaction is supply of foodstuffs and it may merely be incidental to take into account service or other related amenities. Again, it is worthwhile to notice that there is no difference between the price of a foodstuff supplied to customers who eat their meals in the restaurant on its tables and that of a foodstuff purchased by customers to be taken away with them to deal with such foodstuff as they like. I am unable, therefore, to stretch the ratio of the Supreme Court judgment in the case of Associated Hotels of India Ltd.(2) so as to cover See Associated Hotels of India Ltd. v. Excise and Taxation Officer, Simla [1966] 17 S.T.C. 555. the cases of restaurant business also, as the learned counsel for the petitioners wants me to do. The learned counsel laid great stress on, and repeatedly invited our attention to, paragraph 17 of the judgment of the Supreme Court, where it has been laid down: "The transaction between a hotelier and a visitor to his hotel is thus one essentially of service in the performance of which and as p....