TaxTMI 
TaxTMI 
2022 (6) TMI 200
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.... legally justified in remandingthe issue to the assessing authority in regard to levy of trade tax on imported wine when admittedly Excise Duty was paid and the same was apparent on the record duly supported by Notifications and Circulars mentioned in the Written Argument? (iii) Whether the Trade Tax Tribunal was legally justified to dismiss theappeal without considering the fact that no show cause notice was given to the assessee before rejecting the account books? 3. At the time of hearing, only question no. 1 has been pressed. 4. Brief facts of the case are that the revisionist is engaged in the business of manufacturing and sale of cooked food in its hotel as well as restaurants. For the assessment year in dispute, the applicant, at the time of sale of cooked food, has also charged certain amount towards service charges from the customers, who have taken their banquet hall. The said amount has been added in their taxable turnover which has been confirmed up to the Tribunal. Hence the present revision. 5. Learned senior counsel appearing for the revisionist submits that the revisionist is a reputed five star hotel group, who is providing various services to its inmates as w....
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....customer is properly added to the tariff in determining the sale price of the goods purchased. If sales tax can be properly included in determining the sale price, it is difficult to the why the addition of 10 per cent, of the tariff by way of service charges should be on a different footing, and should not be considered as properly included in determining the sale price. 11. The contention of the assessee, that it merely acts as if it werea channel or conduit through which the benefits flow from the collection of this amount for the purpose of distribution to its employees, cannot be accepted. For one thing there is no direct nexus between the whole body of employees to whom the benefits go and the customer who is served by an employee. In the case of a tip, it is a direct payment for satisfactory service rendered by a particular employee who serves the customer. For aught one knows, the customer may not know the number of employees in the establishment, their grades or salaries, and what services they actually render. If the charges were only for the services rendered to the customer, the matter would be on a different footing. Here the services rendered are rendered by the to....
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....view of the judgment of the Hon‟ble Supreme Court in (2000) 117 STC 1 = (2000) 1 SCC 521, the service charges of Rs. 44,45,994 collected separately by the respondent in its cash-memos issued in its restaurant/Coffee House are taxable under the Act of 1975? (ii) Whether on the facts and the position in law under the Delhi Sales Tax Act of 1975 sales of mineral water and aerated drinks effected by the respondent in its restaurant/Coffee House during the year 1997-98 were exigible to tax @ 7% or 10%?" 11. Mr. Taneja, learned counsel for the appellant submits that the aforesaid view of the Tribunal is clearly erroneous. He submits that from the very fact, that the nomenclature used for these charges is stated as service charges, it would be exigible to tax. During the course of arguments, learned counsel also drew our attention to the definition of the terms "sale price" and "turn over" as provided in the Delhi Sales Tax Act, 1975, which are as under: "(a) "Sale Price" means the amount payable to dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in trade, but inclusive of any sum charged ....
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....to such an employee by a person utilizing service while making payment of bill. In these circumstances, naturally component of that tip would not be reflected in the bill. However, in order to ensure that there is no heart burning in a situation where some of the employees are luckier enough as compared to another collecting more tips than the other, the employees may decide that all these tips be pooled so that the same are distributed among them equally. In order to facilitate this move on the part of the employees, management comes to their aid by collecting those tips on behalf of these employees. In these circumstances, we find force in the submission of Mr. Sangal that the respondent assessee is naturally a trusty who collects the amount on behalf of the employees and then distributes the same amongst them. Of course, the agreement shows that 15% of amount so collected was appropriated towards brokage in the crockery. The reason as explained by the learned counsel is that generally because of the brokage in the crockery due to the fault of a particular employee, his account is used to be debited with the amount of damage as well as of the said brokage. Even that is taken care....
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....Sand and Hotel Ashoka cases (SUPRA), the customers who came to the hotel to stay were informed at the time of their arrival at the hotel that they will be subjected to levy of service charges separately in addition to the hotel charges. Thus we find that these judgments of Sun-N-Sand and Hotel Ashoka are distinguishable and as such are not applicable to the facts and circumstances of the instant case. 14. Further, we also find great deal of force in the contention of the appellant which obviously goes in their favour through for the assessment order passed by the Ld. Assessing Authority for the A.Y. 1996-97 tax was levied on the Service Charges as in this case yet the appeal of the dealer was allowed by the First Appellate Authority who remanded the case and that in remand assessment order no tax was charged on service charges and that similarly that no such tax was also levied while making assessment for the years 1998-99, 1999-2000 as well. It obviously shows that the Department agreed with the view of the Dy. Commissioner, that service charges are not liable to be taxed in the case of the appellant dealer. The Department too did not an appeal against the order passed by the D....
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.... there in respect of each customer at varying rates dependent upon the actual services rendered, a uniform rate bearing a certain percentage of the sale price of timber is collected as a trade practice. It is said that all timber merchants usually employ persons who are called "lot men" for the specific purpose of doing the services referred to above for the customers before the goods are actually selected and purchased. From what has been stated above "lot cooly charges" are not paid exclusively for the services rendered in respect of the goods sold but for the services rendered by the "lot men" for the purpose of enabling the purchasers to select the goods. 9. In Dyer Meakin Breweries Ltd. v. State of Kerala [1970] 26 S.T.C.248 (S.C.), the assessee-company which manufactured liquor at various places in U.P. and Haryana, transported the goods from its breweries and distilleries to its place of business in Ernakulam and sold them there to various customers. While selling liquor, the assessee made out separate bills for ex factory price and for "freight and handling charges". The assessee claimed that the amount of freight and handling charges incurred by it in transporting the go....
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....s shown to have the decision in Srinivasa Timber Depot v. Deputy Commercial Tax Officer [1969] 23 S.T.C. 158 reconsidered. 9. He further relied upon the judgements of Supreme Court in State of Tamilnadu Vs. Srinivasa Timber Depot, 1991 Supreme Court page 393 as well as in the case of K. Damodarasamy Naidu & Bros and others Vs. The State of Tamil Nadu and others, (2000 1 SCC 521, in which it has held hereunder :- 8. Learned counsel next contended, relying upon the judgmentsaforementioned, that, in the eye of the law, the tax on food served in restaurants could not be levied on the sum total of the price charged to the customer. In his submission, restaurants provided services in addition to food, and these had to be accounted for. Thus, restaurants provided an elegant decor, uniformed waiters, good linen, crockery and cutlery. It could even be that they provided music, recorded or live, a dance floor and a cabaret. The bill that the customer paid in the restaurant had, therefore, to be spilt up between what was charged for such service and what was charged for the food. 9. The provisions of sub-clause (f) of clause (29A) of Article 366 need to be analysed. Sub-clause (f) permi....
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.... charge in their taxable turnover and imposing tax thereupon. 11. Per contra, learned Standing Counsel submits that in view of Section 2 (h) vii read with Section 3 (A) and 2 (i) of UP Trade Tax Act, 10% charges by the revisionist in whatever name so called, has rightly been included in the taxable turnover. He relied upon the judgement of M/s India Meters Limited Vs. State of Tamil Nadu, 2010 UPTC 1309 where the Apex Court has held that if any amount charged in whatever name, form part of the taxable turnover and therefore he try to justify the impugned order. 12. The Court has perused the records. 13. Admittedly, while passing the impugned order, the Assessing Authority has issued the show cause notice against which the reply has been submitted by the revisionist which is quoted below:- 14. In view of above, the Assessing Authority has recorded its finding, which has been affirmed by the Tribunal. 15. Certain provisions of UP Trade Tax Act will be relevant for deciding the present controversy. Section 2 (h) 'Sale' with its grammatical variations and cognate expressions means any transfer of property in goods (otherwise than by way of mortgage, hypothecation, charge or pled....
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....eferred payment shall be included in the taxable turnover. Section 3 provides for liability of tax under the Act and Section 3 (A) prescribes rate of tax on the turnover of the dealer. 16. The Hon'ble Apex Court in the case of M/s India Meters Limited (supra) has held that turnover as defined under the Act means adequate amount for which goods are bought or supplied . Relevant para of the judgement is quoted hereunder:- 18. It is no doubt true that Rule 6 (c) of the Rules permits deduction of the cost on freight while determining the taxable turnover. However, that provision must be read in the context of definition of "turnover" as also the definition of "sale" in Sections 2(r) and 2 (n) respectively of the Act. 'Turnover" is defined in the Act, inter alia, to mean 'the aggregate amount for which goods are bought or sold or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n)" 17. In view of above, the provisions of UP Trade Tax Act and the provisions of Tamilnadu Sales Tax Act, are analogous. In view of the said fact, the order and judgement given in the case of M/s India Meters Limited (supra) is covers the issue as Hon'ble the Apex Co....