CHANDRA VILAS HOTEL Vs. THE COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THE question involved in this reference which is made by the Gujarat Sales Tax Tribunal is with regard to the interpretation of entry 14 of Schedule A attached to the Bombay Sales Tax Act, 1959 (hereinafter referred to as "the Act"). This entry seeks to exempt "cooked food and non -alcoholic drinks" from payment of sales tax under certain conditions and subject to certain exceptions as mentioned therein.

(2.) SHORT facts of the case are that the applicant -assessee, M/s. Chandra Vilas Hindu Hotel, is a registered dealer carrying on the business of running a hotel and an eating house. It serves at its eating house cooked food and non -alcoholic drinks including tea. Cooked food consists inter alia, of dal (cooked pulses) and shak (cooked vegetables). It also prepares jalebis (a variety of sweet) in its premises. All these articles are supplied to the customers in the premises of the eating house of the assessee. But, some customers prefer not to consume these articles at the premises of the eating house and occasionally take away these articles with them outside the premises of the eating house. On such occasions jalebis are supplied either wrapped in paper or arranged in a basket, while dal and shak and tea are supplied in customers' own utensils.

(3.) THE applicant -assessee contended that jalebis, shak, dal and tea supplied to different customers in this manner were not liable to any sales tax because supply of these articles at the counter would amount to "service" for consumption irrespective of the question whether the articles were consumed by the customers in the eating house itself or whether taken away by the customers for consumption outside the assessee's eating house. This contention of the assessee was rejected by the Sales Tax Officer with the result that, the assessee preferred an appeal before the Assistant Commissioner, Sales Tax. The assessee was, however, not successful in this appeal. It, therefore, preferred second appeal before the Tribunal. Before the Tribunal, the assessee contended that even though jalebis wrapped in papers and supplied in baskets were allowed to be taken outside the premises of the eating house and even though other articles, namely, dal, shak and tea were also similarly supplied in the utensils brought, by the customers, these articles maintain the character of cooked food and non -alcoholic drinks "served for consumption" at the counter of the eating house and, therefore, the turnover represented by such sales was covered by the exemption contemplated by entry 14 of Schedule A. The Tribunal while appreciating this contention of the assessee considered the meaning of the word "served" appearing in the said entry 14 and held that having regard to the entry and different conditions appearing therein, the entry covered cooked food and non -alcoholic drinks served at eating house, restaurant, hotel, refreshment room or boarding establishment, at one time at a price of not more than one rupee, per person, irrespective of the place where such cooked food and non -alcoholic drinks are "served" and does not cover sales or supply of such cooked food or drinks unaccompanied by any "service" being rendered. According to the Tribunal, "service" which is contemplated by entry 14 is service at table and not at counter and, therefore, cooked food and non -alcoholic drinks, in order to come within the purview of entry 14 of Schedule A must be served at table by the concerned restaurant or the eating house at its own premises or outside the said premises at the rates specified per person. The Tribunal further held that in case of jalebis, dal, shak and tea taken away by the customers outside the premises of the restaurant or the eating house, no "service" was rendered by the assessee and, therefore, it cannot be said that these articles were served for consumption within the meaning of entry 14.