TaxTMI 
TaxTMI 
1981 (1) TMI 235
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....1st April, 1966, to 31st March, 1967, the respondents were assessed to sales tax and the Sales Tax Officer held that the establishment conducted by the respondents was a shop conducted primarily for the sale of sweetmeats. He therefore refused to allow any deduction to the respondents for any sales which may be covered under entry 14 of Schedule A to the Bombay Sales Tax Act, 1959. It may be mentioned here that for the earlier assessment years the respondents had been given deductions under entry 14 of Schedule A on the ground that the respondents conducted predominantly an eating house. For the relevant period, however, the respondents were not granted any such deductions. This finding of the Sales Tax Officer was confirmed by the Assis....
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....d an exemption from the payment of sales tax in respect of certain sales falling within entry 14 of Schedule A to the Bombay Sales Tax Act, 1959. This entry, at the relevant time, was as follows: --------------------------------------------------------------------------- "Entry Description of goods Conditions and Period of No. exceptions suboperation ject to which exemption is granted 1 2 3 4 ---------------------------------------------------------------------------- * * * * 14 Cooked food and non-alcoholic drinks *" served at one time at a price of not more than one rupee and fifty paise per person for consumption at or outside any eating house, restaurant, hotel, refreshment room or boarding establishment which is not a....
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.... Supreme Court has held that a hotelier provides many services in addition to the supply of food. He provides furniture and furnishings, linen, crockery and cutlery, and in the eating places of today, he may add music and a specially provided area for floor dancing or in some cases, a floor show. It cannot, therefore, be said that the supply of food at a hotel, restaurant, etc., will amount to a transaction of sale of food simpliciter. This decision of the Supreme Court was confirmed by the Supreme Court in a review application, which is reported in [1980] 45 S.T.C. 212 (S.C.) [Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi]. In this judgment the Supreme Court has observed that the hotel and catering industry is a service-ori....
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....sactions from the levy of sales tax under entry 14 of Schedule A. This aspect of the matter has not been considered at all by the taxing authorities and the Tribunal in the case of the respondents so far. 5.. In relation to the transactions of sale at the respondents' establishment, it remains to be seen whether any such transactions of sale are entitled to exemption under entry 14 of Schedule A. Under this entry exemption cannot be availed of if the cooked food of the type in question is sold by a shop or an establishment conducted primarily for the sale of sweetmeats, confectionery, cakes, biscuits or pastries. Hence, in the present case, what requires determination is whether the establishment of the respondents is an establishment wh....
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....rposes must be incidental or ancillary. This fact can only be ascertained by viewing the entire business of the respondents and examining whether the transactions for the sale of sweetmeats to be carried away predominate over all other transactions. Merely to say that the sales of sweetmeats across the counter exceed all other transactions (which may or may not amount to sales) would not be sufficient. The transactions of sale of sweetmeats across the counter must substantially exceed all other transactions. Only then it would be possible to say that the respondents' establishment is primarily for the sale of sweetmeats and all its other business is merely ancillary. Hence, in the present case, in order to ascertain whether the establishmen....