TaxTMI 
TaxTMI 
1997 (5) TMI 401
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....in the hotel and also to outsiders. During the assessment proceedings, it claimed that its activity in providing food and drinks was by way of service and not by way of sales. This contention was not accepted by the assessing officer. On first appeals, the Assistant Commissioner (Judicial), Sales Tax, held that a part of the supplies of food and drinks was by way of counter-sales that were taxable under the Act while the rest of the supplies to the residents in the hotel and to outsiders in the restaurant was by way of service. The dealer as well as the Commissioner appealed to the Tribunal which held that the dominant object in the entire activity was sale of goods and, therefore, the entire receipts on account of supply of food and drink ....
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....e or restaurant, and it is established upon the facts that the substance of the transaction, evidenced by its dominant object, is a sale of food and the rendering of services is merely incidental, the transaction would undoubtedly be exigible to sales tax. In every case, it will be for the taxing authority to ascertain the facts when making an assessment under the relevant sales tax law and to determine upon those facts whether a sale of the food supplied is intended." "But India is India. It lives in its one lakh villages, thousands of towns, millions of pavement pedlars and wayside victuallers, corner coffee shops and tea-stalls, eating-houses and restaurants and some top-notch parlours. Habits vary, conventions differ and one r....
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.... object in the activity is to be seen. In the present case, the Tribunal, on a perusal of the entire evidence, held that the dominant object in the supply of food and drinks is sale of goods. The learned counsel for the revisionist challenged this finding of fact. It was contended that this Court has laid down that where the customer has no right to take away the food outside the restaurant, the activity has to be deemed to be rendering of service. Reliance is placed on a judgment of a learned single Judge in Commissioner of Sales Tax v. Elchico [1982] UPTC 789. In this case, the learned single Judge observed as under: "3. Music, light, air-cooling, elegant furniture, fine linen, costly crockery, etc., are modern must for an urban restau....
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....ich should have been examined were not placed before the court. In fact the test for determining whether dominant objective was sale or service has been narrowed, by, what has been said, supply and service of food to a customer to be eaten in the restaurant was not a sale for the reasons that he was merely entitled to eat the food served to him and not to remove and carry away the unconsumed portion of the food. As in this case it has been found as a fact that customers were prohibited from carrying away the unconsumed portion of food the case of assessee was squarely covered in the ratio laid down in it." 5.. The same view was repeated by the learned single Judge in Commissioner of Sales Tax v. Moti and Jawahar [1982] 50 STC 172 (All.);....