- (1.) This and connected appeal are directed against the judgment of the High Court of Delhi disposing of a reference made to it under S. 21 (3) of the Bengal Finance (Sales Tax), Act, 1941 as extended to the Union Territory of Delhi on the following question:- "Whether the service of meals to casual visitors in the Restaurant is taxable as a sale (i) when the charges are lump sum per meal or (ii) when they are calculated per dish ' The High Court has answered the question in the affirmative.
(2.) The appellant runs a hotel in which lodging and meals are provided on "inclusive terms" to residents. Meals are served to non-residents also in the restaurant located in the hotel. In the assessment proceedings for the assessment years 1957-58 and 1958-59 under the Bengal Finance (Sales Tax) Act, 1941, the appellant contended that the service of meals to residents and non-residents could not be regarded as a sale and therefore sales tax could not be levied in respect thereof. The contention was rejected by the sales tax authorities, who treated a portion of the receipts from the residents and non-respondents as representing the price of the foodstuffs served. At the instance of the appellant, the High Court called for a statement of the case on two questions. One was whether the supply of meals to residents, who paid a single all-inclusive charge for all services in the hotel, including board, was exigible to sales tax. The second was the question set forth above. The High Court answered the first question in favour of the appellant and the second against it. And now these appeals by special leave.
(3.) Tax is payable by a dealer under S. 4 of the Bengal Finance (Sales Tax) Act, 1941 on sales effected by him, and the expression "sale" has been defined by S. 2 (g) of the Act to mean "any transfer of property in goods for cash or deferred payment or other valuable consideration including a transfer of property in goods involved in the execution of a contract .. ... ..." The question is whether in the case of non-residents the service of meals by the appellant in the restaurant constitutes a sale of foodstuffs. It appears to us that after the view taken by this Court in State of Himachal Pradesh v. M/s. Associated Hotels of India Ltd., (1972) 2 SCR 937 : (AIR 1972 SC 1131) the approach to the question before us is clearly indicated.;