TaxTMI 
TaxTMI 
2001 (12) TMI 903
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.... read with Section 36B(a) as well as Section 37 of the Monopolies and Restrictive Trade Practices Act, 1969 (hereinafter referred to as the Act). The allegation consists of recovery of compulsory service charges at 9% of the total bill for taking food in the restaurant. 2. Briefly stated the facts are that one Mrs. S.S Ahuja during her visit to a restaurant namely, Pizza Express, Connaught Place in New Delhi, discovered that the bill for food included additional amount of 9% towards service charges along with cost of food. On an inquiry made from the waiter, the amount was stated to be compulsory tip charges recovered from all customers who visit the restaurant. Understanding the tip charges to be optional, the practice of recovering servi....
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....red, it also indicated sales tax, service charges, etc. It levied service charges as duly approved by the Department of Tourism as is the case in most of the hotels/restaurants. These are duly reflected on the menu cards. As the customers are duly informed of the charges to be levied, no unfair or deceptive method is stated to have been adopted to recover the amount. There is also no tie up between the products sold by the respondent and the service charges levied by it. There is a take away service available in the restaurant as clearly indicated in the menu card and it is only the food served in the premises that carry service charges reflected in the menu card. The charges so levied are not in the nature of compulsory tip but a commercia....
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....ervice charges. She, however, maintained that there are few hotels/restaurants who do not levy service charges. As per Shri Sanjay Mohindra appearing on behalf of the respondent, service charges are part of the price of the food items served inside the restaurant. The services mentioned in para 8 of the affidavit were stated to be merely a few of illustrations. Quite a few other benefits like offer of complimentary ice-creams to children, etc. were mentioned to justify the service charges by the respondent. 8. We have carefully considered the submissions made on either side and have also gone through the material placed on record. As agreed to on both sides, the photostat copies of the menu cards of the restaurant placed on record by the r....
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....or levying service charges, as is the practice in other similar restaurants/hotels, does not make the practice as unfair within the meaning of Section 36A of the Act. There is thus no unfair practice or deceptive method adopted by the respondent as contended by the complainant. In fact the extra levy at 9% would act as a disincentive to the promotion of sales, which is a pre-requisite condition for holding the trade practice to be unfair. 9. It is true that, as generally understood and also impliedly accepted by the respondent, the tip is a voluntary contribution, which cannot be quantified. To the extent the averments of the complainant are correct. In view of the stand taken by the respondent, however, not much weight can be attached to ....