Manoranjan Virk, Member (A) -
(1.) BOTH these appeals have been filed against the orders of the Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad for the assessment years 1997 -98 & 1998 -99 (APGST). The appeals relate to a single issue i.e., whether turnover related to supply of packed food to Indian Airlines would be taxable U/s. 5 or U/s. 5C of the APGST Act, 1957. The appellant submits that Sec. 5C of the APGST Act, 1957 covers all the services provided by the restaurants and hotels including the supplying by way of parcels and tax is accordingly to be levied @ 5% only. The contention of the assessing authority and also the Appellate Deputy Commissioner is that the appellant has not rendered any service while supplying the goods in packed form to Airlines and that this is simply a sale of food and is to be taxed U/s. 5 of the Act @ 9%. The Appellate Deputy Commissioner has relied on the Govt. Memo No. 81042/CTII (1)/97, dated 12.3.1998, wherein the Government of Andhra Pradesh clarified that the supply of food and drinks made by M/s. Raj Residency, Hyderabad to Indian Airlines for in flight catering was taxable @ 9% under Entry 129 of the I Schedule to APGST Act. The appellant has stated that the assessing authority and Appellate Deputy Commissioner as quasi judicial authorities are expected to pass objective orders and not to rely on Government Clarifications. They have relied on the judgment of the Hon'ble A.P. High Court in W.P. No. 15052/01 in the case of M/s. Xerox Modi Corp. Ltd. vs. State of Andhra Pradesh, wherein, the Hon'ble High Court directed that the adjudicating authorities under the APGST Act, should decide the question raised by the appellants on the basis of evidence and legal contentions that may be placed before them independently, de hors the opinion expressed by the Government in Govt. Memos. The appellant has also relied on the order of the Hon'ble A.P. High Court in the case of State of Andhra Pradesh vs. Shivaji Military Hotel, Warangal, reported at : (1997) 15 APSTJ 19, wherein, the Hon'ble High Court held that the benefit of the Notification II in G.O.Ms. No. 1025, Revenue, dated 22.8.1986 is available not only when the food articles were served by way of service in a hotel but also when sales are effected across the counter or by way of the parcel sales or take away packs from the hotels. The appellant has stated that the words in G.O.Ms. No. 1025 are identical to the words in Sec. 5C and therefore the interpretation placed on the G.O., by the Hon'ble A.P. High Court is binding on Sec. 5C also. The appellant has also relied upon the judgment of Sales Tax Appellate Tribunal in the case of M/s. Hotel Sri Krishna Limited, Hyderabad vs. State of Andhra Pradesh in T.A. No. 184/03, dated 23.1.2007, wherein, an identical question has been discussed and decided by this Tribunal in favour of the appellant directing that the tax should be levied under the provisions of the specific section 5 -C of APGST Act, 1957 and not u/s. 5 (Entry 129 of I Schedule) of the APGST Act will be applicable to the packed food stuffs supplied to the Indian Airlines by the appellant.
(2.) THE learned State Representative has supported the orders of the Appellate Deputy Commissioner. Having heard both sides, we have also gone through the order of the Hon'ble A.P. High Court in Shivaji Military Hotel, Warangal and also judgment of this Tribunal in T.A. No. 184/03, dated 23.1.2007. Our order dated 23.1.2007 in T.A. No. 184/03 is on an identical issue related to M/s. Hotel Sri Krishna Limited, Hyderabad. For the same reasons as given by us in the earlier order, we are of the view that the turnover of the appellant related to supply of packed food to Indian Airlines has to be assessed under the provisions of specific Sec. 5C of the Act and not U/s. 5 (Entry 129 of I Schedule to the Act). Sec. 5 of the Act is a general charging section and Sec. 5C of the Act is a specific section for charging tax in respect of supply of food and drinks in restaurants and hotels. Sec. 5C of the APGST Act reads as follows.
"5C Tax in respect of supply of articles of food or drinks in. restaurants or catering houses or hotels: Notwithstanding anything contained in section 5 of section 6, every dealer running any restaurant or eating house, or hotel, (by whatever name called), who supplies, by way of or as part of any service or in any other manner whatsoever of goods, being food or any other article for human consumption or any drink (whether or not intoxicating) and whether or not such goods have suffered tax under this Act, where such supply or service is for cash, deferred payment or other valuable consideration shall on the total amount charged by the said dealer for such supply, pay a tax at the rate of eight paise on every rupee on the aggregate of such amount realized or realizable by him during the year.
Provided that no such tax shall be levied if the total turnover of the dealer including such aggregate during the year is less than Rs. 2,00,000."
As it is settled law that a specific section overrides a general section, in our opinion, provisions of Sec. 5C will only be applicable in the present case, as admittedly the appellant runs a hotel. It is clear that Sec. 5C will be applicable even when the Hotel supplies packed food because Sec. 5C covers supplies of food articles made by a hotel "by way of or as part of any service or in any other manner whatsoever". So far as the Government Memo is concerned as discussed by us in our previous order the quasi judicial authority shall not be influenced by any clarification given by the Government unless it is by way of a Government Order. This is in keeping with various decisions rendered by the Higher Courts and the Apex Court. One such decision has been relied upon by the appellant. The quasi judicial authorities are expected to pass objective orders by interpreting legal contentions independently and are not expected to be influenced by Government clarifications which are not binding on them. More over, a Government Memo cannot override the provisions of a section in the APGST Act. More so, when as in the present case, there is a specific section for charging tax from hotels and which is clear and unambiguous. In view of the above discussion and consistent with our earlier orders on an identical issue in our order referred to above, we are of the opinion that the orders of the Appellate Deputy Commissioner need to be set -aside and are accordingly set -aside.
In result, both the appeals are allowed.
Dictated to Stenographer, transcribed by him and pronounced on this the 1st day of June, 2009.;